Huh? What did hedge funds do?

David Fine questions Angelo the Good Humor man/hedge fund operator

 

Old Greenwich resident David Fein is Connecticut’s new U.S. Attorney and immediately upon his swearing in, vowed to go after Greenwich hedge funds. It seems we have just inherited another blow hard politician. 

Hedge funds didn’t bring down the banking system, bankers did. Furthermore, pre-Madoff, the DOJ wasn’t the slightest bit interested in pursuing wicked stock brokers who ripped off unsophisticated customers – I know that because I tried, many times, to get their attention (and Dick Blumenthal’s too) to no avail. 

But now it’s a hot political item, so the pols are piling on. The trouble is, the banks are too big to pick on, the little old ladies fleeced by their stock brokers are too insignificant to garner the publicity these people crave, so they’ll go after hedge funds, which had nothing to do with the problem, and get the headlines they want. Idiots. 

The rest of Connecticut better hope Mr. Fein fails in his attempt because Greenwich is paying the state budget. If the hedge funds go, so goes Hartford, Bridgeport and every other backwater impoverished city in this blighted state.

8 Comments

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8 responses to “Huh? What did hedge funds do?

  1. Anonymous

    Oh, Christ, Chris. The man is forming a securities fraud unit, which our USA office lacks and which is present in every other USA office that oversees districts with a significant financial services sector.

    Also, are you seriously going to sit there and claim that no hedge funds have been involved in any kind of fraud? Were you living underground during the Galleon affair?

  2. Last Liberal Standing

    Ditto what Anonymous said.

    Your closing argument, CF, amounts to, “They better not mess with Greenwich! Greenwich is rich, and it finances the rest of Connecticut, so back off, you hypocritical do-gooders! Or we’ll cut you off.”

    A parallel argument would be that Al Capone “supports” the local police by contributing to their annual benefit softball game, so it’d be imprudent to investigate Al’s income sources.

    I’m not saying all hedge funds are criminal–I admit that I know very little about hedge funds–but the article doesn’t say that David Fein “vowed to go after Greenwich hedge funds,” as you put it. The article says that he “announced a crackdown on securities fraud, particularly criminal management in the operation of hedge funds.” See the word “fraud”? See the word “criminal”?

    • LLS, I’m not suggesting that fraud go unpunished – I spent a decade hunting stock brokers who ripped off unsophisticated, often elderly investors and my heart is still in the chase. And I didn’t suggest that hedge funders would “cut off” Hartford. But in twenty years of lawyering, I saw what investigations can do to disrupt the operations of totally blameless companies – documents must be produced by the millions, employees and executives forced to spend days in depositions, etc. So my point is, Fein should tread carefully. A targeted campaign against fraud? Fine (so to speak). But a witch hunt against hedge funds could result in driving them out of state – there’s nothing easier to move than a hedge fund – and if they leave, the income tax they pay will leave with them and between Stamford and Greenwich, something like 35% of Connecticut’s tax revenue will go poof.
      So, tolerate or ignore fraud? Never. But a campaign of harassment against all hedge funds when the vast, vast majority of them are legitimate businesses? Bad move.

  3. Last Liberal Standing

    Chris,

    Nicely explained! Thanks.

    You definitely have the ability to make a reasoned explanation or argument–you ought to consider the law!–but I guess you draw in the readers by making half-assed or quarter-assed remarks as your modus operandi.

  4. Last Liberal Standing

    Me English teacher. Me like ambiguityness. Me like last reply about emulating–could mean emulating clarity or emulating half- and quarter-assedness. Heap kudos!

  5. Anonymous

    I guess my problem with the post is that it assumes Fein — who is by all accounts a serious professional — is going to “go after” hedge funds in some sort of cynical witch hunt. This is a guy who has dedicated nearly his entire career to public service, and he certainly had the option to head into private practice and make millions. These are the kind of people we should want in government.

  6. Priapus

    Chris, your point about over reaching government bodies disrupting legitimate businesses is well taken. I have seen numerous instances of overzealous investigators from the SEC ruin lives with the ultimate conflict of interest where they use taxpayer resources to bankrupt individuals, in essence trying to make their careers while ruining the lives, families, and livelihoods of compliant operators. It’s a disgrace, as many went on while Madoff fiddled.