HedgeFund.net reports that the Securities and Exchange Commission, specifically the New York office, is going to ramp up its sweeps of investment advisers, in particular hedge funds.
George Cannellos tells the Tuna that the SEC is hiring more experienced agents, bringing in knowledgeable outsiders such as Norm Champâ€”formerly general counsel at Chilton Investment Co. and on the board of the Managed Funds Associationâ€”and generally approaching things from a risk-based perspective.
“In the last few monthsâ€”really in the last year or twoâ€”we have tried to orient our program, especially the investment management program, more toward cause- and risk-based exams,” Cannellos tells HFN.
Wait, is it the last few months or the past year or two? And if you mean the latter, do you really want to stick with that? Has anyone mentioned the name “Madoff” to you? It’s been in the newsâ€¦.
Many years ago, I had a long discussion with a fund manager fuming about pension funds demanding position-level information. “What are they going to do with it?” he asked. It was a good point. Information is only useful when it can be analyzed, interpreted and acted upon. What’s a pension fund with a five-person investment staff going to do with thousands of daily positions?
Similarly, the SEC better have some really smart people looking at the information it obtains from these “surgical requests.” Even if they are smart, it’s not like these folks are just sitting around like the detectives on the TV shows, ponderously working one case at a time. If anything, caseloads are on the increase. An overworked staff is going to get some help from new hires, but will it be enough?
Commenter “Rabid” suggests requiring all SEC inspectors to pass a Series 7 exam. Sounds good to me. “SECisajoke” asks a question that perhaps the Tuna reporter might consider posing to Cannellos: List the frauds uncovered by the SEC in the last 12 or 24 months.
Shumway Sells Stake
Earning good returns has its rewards. According to Bloomberg, Shumway Capital Partners sold an 8% stake in the firm to a leveraged buyout fund run by Goldman Sachs. Terms were not disclosed, but you can bet they will be, or at least speculated upon.
Eight percent may not seem like a lot, but we’re still relatively early on the timeline of these sorts of hedge fund-staketaker relationships. It would be interesting to hear from some managers who’ve sold stakes in their firmsâ€”and how that’s working outâ€”and from managers who’ve refused to do soâ€”and whether or not they wish they had.
New Marketing Strategy: Blow Stuff Up
So Kraft Foods, apparently not content with waging financial war on Cadbury Plc, has decided to bring in the heavy artillery. It’s going to pay the City of Irving, Texas, $150,000 to sponsor the demolition of Texas Stadium, formerly the home of the Dallas Cowboys football team. Allegedly dubbed the “Cheddar Explosion,” the deal to demolish the stadium is tied in with the Macaroni & Cheese brand.
Now I grew up eating Mac & Cheese, the original stuff out of the box with the extra-terrestrial orange powder in the heavy paper envelope. My parents tried buying the generic stuff, telling me there was no difference. They’d even hide it from me, make it, and try to pass it off as the Real Stuff. But I could tell.
And now this. As a rule, I love watching video of empty buildings getting blown up. I shrieked with joy when they blew up the wretched Kingdome.
Far better than the gradual and depressing wasting away of that festering sore of a stadium in Detroit. The Kingdome video versus the Tiger Stadium photo dirge should put to rest forever the question of whether it’s better to burn out or fade away.