Sound Practices for Hedge Fund Managers

The Managed Funds Association updated its Sound Practices for Hedge Fund Managers (.pdf) in November, 2007 in response to the initial drafts of the President’s Working Group on Financial Markets. The objectives of Sound Practices are to: Strengthen business practices of the hedge fund industry through a strong framework of internal policies and practices Encourage […]

Read full story · Comments { 0 }

What is a Hedge Fund?

The President’s Working Group on Financial Markets Report of the Asset Managers’ Committee uses this as a definition of “hedge fund.” By “hedge fund” we mean a pooled investment vehicle that generally meets most, if not all, of the following criteria:  (i) it is not marketed to the general public (i.e., it is privately offered), […]

Read full story · Comments { 0 }

Establishing an Integrated Risk Management Framework

Scott Kwarta, Director of Advisory Services at OpenPages, Inc., put together a presentation on Establishing an Integrated Risk Management Framework (.pdf). I like this depiction of the risk management cycle:

Read full story · Comments { 3 }

What is Enterprise Risk Management?

The Committee of Sponsoring Organizations of the Treadway Commission adopts this definition of Enterprise Risk Management: Enterprise risk management is a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to […]

Read full story · Comments { 0 }

Second Circuit Affirms Ionia Management Case

The Second Circuit Court of Appeals focused on the standard for convicting a company of criminal charges for acts of its managers and employees in US v. Ionia. The Second Circuit declined to change the standards for corporate criminal liability and keeps Respondeat Superior in place. The court found there was ample evidence that the […]

Read full story · Comments { 1 }

Boston University’s Code of Conduct

For a change of pace, I thought I would look at the codes of conduct for educational institutions for their take on the issues. Boston University has an easy to find page with the President’s Statement of Commitment to Ethical Conduct with a link to the BU’s Code of Ethical Conduct. Boston University is committed […]

Read full story · Comments { 0 }

CEO Pay and the Lake Wobegon Effect

Rachel Hayes and Scott Schaefer of the University of Utah have published CEO Pay and the Lake Wobegon Effect in the Journal of Financial Economics.  The central tenet is that every CEO wants to be paid above average because that means the company is performing above average.

Read full story · Comments { 2 }

President’s Working Group on Financial Markets Reports

Asset Managers’ Committee and the Investors’ Committee of the President’s Working Group on Financial Markets Reports have released their best practices reports for hedge fund managers and investors, respectively: Asset Managers’ Committee Report (.pdf) and the Investors’ Committee Report (.pdf). In the Asset Manager’s Committee Report: A Manager should establish a comprehensive and integrated compliance […]

Read full story · Comments { 1 }

Document Retention Policies and Spoliation of Evidence

In a recent case, a court found the implementation of a document retention policy to amount to the spoliation of evidence and imposed the “nuclear” sanction of declaring the suit unenforceable. In the case of Micron Tech. v. Rambus in the U.S. District Court for Delware, Judge Sue Robinson was addressing the effect of Rambus’ […]

Read full story · Comments { 1 }

Data Breach at Heartland Payment Systems

Heartland Payment Systems (HPY) disclosed that intruders hacked into the computers it uses to process 100 million payment card transactions per month for 175,000 merchants.  The company said it couldn’t estimate how many customer records have been compromised, but said the data compromised include the information on a card’s magnetic strip  that could be used […]

Read full story · Comments { 0 }