Fund Stole From Clients, Got Lavished In Lap Dances
The SEC is pawing through the records of the collapsed investment firm Sentinel Management Group and getting lap dance remains all over their hands. Bloomberg reports it looks like SMG's lead trader Charles Mosley sold their clients what now amount to worthless securities ("wallpaper," says the guy in charge of unwinding the company), and the brokers he bought them from showered him with tickets to sporting events, limousine rides, and even underwrote his lap dances. Musta been fun while it lasted.
Bankruptcy Sleuths Find Cash in Trader Receipts for Lap Dancers [Bloomberg] (Photo: ClevelandSGS)
Post a comment
Comments:
If there's ever proof needed that guys that go on lapdancing junkets are jerks one step away from fraudulent ruin...
Plenty of hedges pay associates directly from the fund when it performs. That's the source of revenue for the company, after all - drawing a paycheck when the fund is up is just like taking commission on a sale or receiving salary in that world. Performance is the product, performance is the pay. Obviously you're supposed to have actual performance instead of fictionalized returns.
But still, way to go, jackasses. Now the whole of the media gets to cast aspersions on your competitors, who did not steal from their clients. I used to be able to point to major alpha in the whole active management/passive management debate, and now people can credibly counter with "how much of that is a lie?"
@Trai_Dep: No kidding! Why isn't the SEC watching these guys BEFORE they steal the money?
There had to be paper trails of these activities going on for years. They don't get this brazen all of a sudden - it happens because they did it for years and never got caught.
At least they didn't involve "innocent" parties as in some of the TN scam cases:
"The McLean case has resulted in more widespread damage. That trustee sued Nashville's Country Music Hall of Fame, McLean's 88-year-old aunt and Middle Tennessee State University, among others, invoking the principle that Ponzi-tainted assets must be returned to the bankruptcy estate. In 2004, amid great publicity, McLean presented the museum with funding to acquire a treasure trove of musical instruments: Bill Monroe's mandolin, Mother Maybelle Carter's guitar and two of Johnny Cash's guitars. The trustee sought $1.5 million from the Hall of Fame but eventually settled for half that amount. Still, the settlement forced the museum to mount a fundraising drive at the beginning of 2009 amid daunting economic conditions."
"...getting lap dance remains all over their hands."
Eeewww.
Is anyone else starting to feel left out of all this... I should have read that SPAM promising I could get rich quick... this is just another train that left the station without me.
It's good that the SEC is investigating these rule breaking companies, but it would be nice if they could start preparing ways to find companies in the act.
That wallpaper comment reminds me of this great Flickr album showing Zimbabweans creating political posters out of their money, since it's so worthless (billion dollar bills anyone?): [www.flickr.com]
It's both gorgeous and sad.