Karen the Supertrader - TastyTrade Hybrid Experiment

Discussion in 'Journals' started by Sweet Bobby, May 18, 2016.

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  1. Wow what happened to you... you dump on Neke who at least was posting live updated real trades and hitch your wagon and praise to Marsman and Bobby and defend them to the death?
    #871     Oct 2, 2016
  2. I would imagine she is still trading away. I think I saw that she filed a motion to dismiss the complaint, though I haven't seen it. She will not go to jail.
    #872     Oct 2, 2016
  3. Filing a motion to dismiss.......that's typical for defendants no matter how guilty they are........but I can't imagine anyone who is aware of the situation would want to invest their money with her.
    #873     Oct 3, 2016
  4. DTB2


    I thought the account was frozen already?
    #874     Oct 3, 2016
  5. atrp2biz


    I just read the SEC's claims.

    It's not clear if Karen's method was profitable or unprofitable during the tenure of her fund. In fact, it's very possible she was still profitable otherwise I'm sure there would have been reference to overall fund losses in the claim. The primary claim is that she was unjustly enriched by fees despite unrealized losses on the books.

    The SEC alleges she rolled unrealized losses, but overall it's difficult to gauge the overall performance of the fund. To roll her losses, she allegedly bought a DITM call calendar spread and allowed the short front month calls to be assigned in month X. She realized a gain on the assigned calls while the unrealized losses on the futures would roll into the next month. Sell the long calls and rinse and repeat. What I don't understand is how the rinse and repeat part of it doesn't realize those losses unless the fund charges. In my mind, you could only do this for one month before you would have to realized the losses on the assigned futures.

    I agree--she's not going to jail for this.
    Last edited: Oct 3, 2016
    #875     Oct 3, 2016
  6. Surprise


    If she was profitable why would she need to doctor her perdormance? They mentioned that she had big losses .

    Note : Unrealised loss is a loss .
    #876     Oct 3, 2016
  7. atrp2biz


    Because she was paid based on realized profits in excess of the HWM. The SEC claims she rolled unrealized losses, but the fund could still be profitable overall from the individual investors' standpoint.
    #877     Oct 3, 2016
  8. Surprise


    Anyone and his dog can be profitable ... 1% annually is profitable . Point is claims made about her great performance are false and she is a fraud .
    #878     Oct 3, 2016
  9. atrp2biz


    What claims about her performance? Isn't that what we're trying to reconcile? Everyone is saying her fund blew up, but I don't think that's necessarily the case.
    #879     Oct 3, 2016
  10. Pekelo


    Slightly offtopic, but interesting:

    I don't envy the prosecutor who has to introduce 12 average jurors to the wonderful words of options, rollovers, monthly accounting, etc. They are probably going to make a deal for a fine, after all it is rather hard to prove intent. There is a fine line between just being a bad hedge fund manager and knowingly causing losses. Also because of her disclosures, some of the stuffs she did wasn't even illegal, just amoral and unusual.

    If she has a good lawyer, they can go with the Kenny Lay defense: "I am stupid, not evil."
    #880     Oct 3, 2016
    DallasCowboysFan likes this.
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