23 September, 2007
It's too early to know whether anything was done which could give those investors a basis for suing Absolute Capital, but it does seem strange to me that investments of a significant part of a fund's assets can be made into illiquid 'micro-cap' stocks without the investors' knowledge.
I am no friend of regulation, and I well understand that hedge funds are left alone on the basis that rich people should be free to throw away their money if they choose to, but if it was my money (I don't have that sort of dosh) I should at least want to know that the managers were bound by rules which they could only break at the cost of their reputations.
My doctor, my lawyer, my accountant, even my real estate consultant, are all bound by professional disciplines, and they would lose their livelihoods if they transgressed; but not hedge fund managers. Strange.
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