Denver Post – Hedge funds are being offered a deal to help the feds rescue the banking system: A low-risk opportunity to buy bad bank assets that could one day make them a killing.

But the deal could make for an uneasy partnership. The government also wants to closely police hedge funds — large investment pools that cater mainly to the rich — some of which have been accused of placing irresponsible bets that helped trigger the financial crisis. Such regulatory overhaul could reshape an industry known for secrecy and little oversight.

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Tags: bank assets, banking system, bets, denver post, feds, financial crisis, investment pools, mdash, oversight, partnership, risk opportunity, secrecy

Bloomberg – When Manhattan lawyer Marc Dreier needed to apply a patina of reality to allegedly bogus promissory notes he was pitching to hedge funds, he used Mission Impossible- type tricks.

As the U.S. Attorneys Office in Manhattan tells it, he would lie his way into an accounting firm’s or real estate developer’s offices as if he had business there.

He then would use their conference rooms for meetings with hedge-fund officials to make it seem the accountants or developers were in on the deal, according to the feds.

Appropriating the accounting firm’s letterhead, he fabricated financial statements and forged audit letters, prosecutors and the Securities and Exchange Commission allege. He would arrange conference calls between hedge-fund representatives and someone pretending to be the chief executive of Solow Realty, the developer and former Dreier client whose fake notes the feds say Dreier was trying to sell.

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Tags: accountants, accounting-firm, attorneys office, bloomberg, chief-executive, developers, feds, financial-statements, fund-officials, letterhead, manhattan lawyer, mission impossible, patina, promissory notes, prosecutors, real estate developer, securities-and-exchange, securities-and-exchange-commission, solow realty