October 21, 2006

What the Lack of Regulations Can Do

-- By Pushpa Sathish, Staff Writer

Philip Jabre has earned the ire of Bloomberg news columnist Mathew Lynn. And rightly so! The ex-manager of the London-based hedge fund GLG Partners LP was recently in the news over allegations of insider trading. The UK Financial Services Authority (FSA) had fined him a record amount for his illegal activities, but that does not seem to have deterred him one bit.

Hardly two months down the line and Jabre is setting up shop in Switzerland with a financial company that may set up a hedge fund in the near future. A move which leads Lynn to reach the following not-so-flattering conclusions about the hedge fund industry:

  • It does not take self-regulation seriously enough
  • It cares not a smidgen about the image it projects
  • It only wants to make as much money as it can before the house of cards comes tumbling down

With the hands of the authorities tied, Lynn is appealing to other hedge funds and those with pull in the industry to blackball Jabre’s fund in the most polite way they can. After all, a fund cannot survive or make money without investors, bankers, and traders. Isn’t that the only way to do right by those who invest in the industry?

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