Millennium Partners negotiating massive settlement

Discussion in 'Wall St. News' started by gwb-trading, Nov 3, 2005.

  1. gwb-trading


  2. Any fines should be paid by Mr. Englander or the Fund Manager and NOT the Fund. why should the investors bear the pain of this?
  3. That's not what the article appears to be saying, though.

  4. Well, I've seen other articles that seem to indicate that the Fund will pay the fine and even the Fortune article indicates that's MP has already established a 10% hold-back to account for any settlement. So it seems clear that IE/MP want's the fund/fund investors to pay the fine -and my position is that, such a scenario should not be allowed.
  5. Absolutely.
  6. I have been busy with other stuff.

    MP, from the little that I know, has one of the most lax internal control for a hedge fund that I have ever known. I know a couple of traders there, and they seem to say that firm-level risk management is virtually non-existent (and they are surprised since they used to work for ibanks), and on top of that traders don't talk to other traders, so no one has any idea what kind of strategies each other are doing. 2 of them ended up leaving because it was a "madhouse" with traders compete with each other, trying to get bigger payouts due to individual book performance.

    I have no stories about IE, since my knowledge about MP was very little. With an atmosphere like that, I am not surprised that some one pulled something illegal.

    As an aside, this is why I believe that hedge fund should be required more disclosure and regulation. Yes, I know it seems weird coming from a person who is associated with the HF industry, and may end up back in there. But HF grew as a "cottage industry", with no standard operating model, so you have people ranging from rigid mathematicians (who would make $100M bets after $100M bets because the models tell them to) to wild-west-cowboys (who would buy 1M shares, stocks drops, and then buy 5M shares to push it up). And then giving them massive leverage (thank god that leverage ratios have been pushed down in the recent years), with some fund's poor to non-existent risk, compliance and regulatory oversight, is a recipe for disaster. Most Hedge Funds don't *Hedge*, is well known.