Examiner – There is a global movement towards the harmonization of best practices and standards in the hedge fund industry amongst investors, hedge funds, funds of hedge funds, policymakers, service providers and regulatory authorities. In response to the global financial crisis, the G20 agrees on the need to extend regulation and oversight to all systemically important firms, including hedge funds.

Organizations such as the Alternative Investment Management Association (AIMA), Hedge Fund Standards Board (HFSB), International Organization of Securities Commissions (IOSCO), Managed Funds Association (MFA) and the Asset Managers’ Committee of the President’s Working Group (PWG) have individually published viewpoints on how a system of best standards and practices should be adopted.

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Tags: boston globe, executive-director, hundreds of thousands, investment-management, management board, pension agency, pension-fund-assets, pension-funds, public pension fund, record decline, state pension, travaglini

New York (HedgeCo.Net) – Two New York residents were charged yesterday by the Commodity Futures Trading Commission after allegedly misappropriating at least $553 million of client’s funds. 

Stephen Walsh of Sands Point, NY and Paul Greenwood of North Salem, NY are being hit with futures fraud in connection with their companies, which include Westridge Capital Management Inc., WG Trading Investors, LP, and WGIA, LLC.

“Defendants treated investor money– some of which came from a public pension fund– as their own piggy bank to lavish themselves with expensive gifts,” said Stephen J. Obie, Acting Director of Enforcement for the CFTC.

According to the complaint, Walsh and Greenwood took approximately $1.3 billion from investors in their entities since 1996.  The men allegedly told their clients that all of the funds would be employed in a single investment strategy of index arbitrage.  

They then doctored false promissory notes to keep up the appearance to investors.  In reality, the funds were transferred to another entity, where Walsh and Greenwood dipped into the cash for personal spending sprees which included horses, residences, and even an $80,000 teddy bear.  It is estimated that they withdrew $160 million total for personal expenses.

The CFTC is seeking a statutory restraining order that will freeze their assets while preserving records.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: accredited-investors, capital-management-inc, cftc, commodity futures trading, commodity-futures-trading-commission, expensive gifts, false promissory notes, futures-trading-commission, index arbitrage, investor-money, north salem ny, paul greenwood, personal expenses, preserving records, public pension fund, sands point, sprees, stephen walsh, westridge capital, york residents

Guardian Unlimited – Japan’s public pension fund, the world’s largest, said on Thursday it needs a deeper study of diversifying into alternative investments, such as hedge funds and real estate, after seeing the asset class hit by the financial crisis.

Takahiro Kawase, president of the Government Pension Investment Fund (GPIF), denied a media report last week that it was planning to start investments in real estate funds from the business year beginning on April 1, 2010.

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Tags: alternative investments, april 1, asset class, financial crisis, government pension, guardian-unlimited, investment-fund, japan, pension investment, public pension fund, real estate funds