Hedge Fund – Risk Management in the Post-Madoff Era of Fraud!!!

HAT TIP: Risk Management Magazine


We are really concerned with helping to provide the tools (and a tad bit of common sense) that will help you to better protect yourself against some of the current SCAMS being waged against us in the Dinarian Community!

One of the biggest threats are these Hedge Funds being sold, which in our opinion are being sold by unreliable, and possibly down right blatant con artists!!!

This article from Risk Management Magazine was written by Pat Huddleston, here is his short bio, and link to his blog:

Pat Huddleston served as the enforcement branch chief of the SEC’s enforcement division from 1992 to 1996. He currently lives in Atlanta as founder and CEO of Investor’s Watchdog, an investor protection company. You can read more from Huddleston on his company’s blog, Investor’s Watchblog.

We hope that you read this, and share this with  your fellow IQD investor friends.

~ Mr. IQD


by Pat Huddleston

From 1977 to 1982, Larry Wilcox was a television star, playing officer Jon Baker opposite Eric Estrada in the hit NBC television series CHiPs. When he left the small screen, Wilcox branched out into other business ventures. He remained far out of the limelight until October 2010, when the U.S. Justice Department charged him with participating in a microcap stock scam that involved bribing pension plan employees. In November 2010, Wilcox pled guilty to one count of conspiracy to commit securities fraud. 

Wilcox’s fraud was a classic “pump and dump” scheme, in which the fraudsters control worthless shares of small companies, pump up the price of those shares with rigged trading and false press releases and then sell the shares to innocent investors. The SEC will stop dozens of such scams this year (and every year). Luckily, no investors lost money in the Wilcox case; the corrupt pension fund employees were actually undercover FBI agents. 

Most pump and dump stories don’t end so well. In the late 1990s, Russian mob boss Semion Mogilevich — now on the FBI’s Most Wanted list — made the Toronto Stock Exchange and prominent Canadian politicians unwitting players in a $150 million pump and dump scam involving shares in Pennsylvania-based sham company YBM Magnex International, Inc., which was purported to be a worldwide manufacturer of industrial magnets. After the FBI and other authorities raided the company’s headquarters in 1998, exposing the fraud, its shares fell to zero. The fraud victimized not only individual investors, but also institutions, including mutual funds and the Ontario Teacher’s Pension Fund. 

Whether it is a pump and dump scheme or any other scam, avoiding professional investment fraud is not easy. Professional con artists are well funded and as skilled in their craft as world-class athletes. Not falling victim begins with admitting that you are…  (to continue reading, please goto original blog post)

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