Big money dictated fund-deal scheme

[NNN0LHI]

http://www.nj.com/business/ledger/index.ssf?/base/business-5/1062911785144960.xml

Revenue projected at $2.25 million a year

Sunday, September 07, 2003

BY DAVID RESS
Star-Ledger Staff

Eddie Stern, whose family made a fortune from the Hartz Mountain flea-collar and pet-food empire, had a bright idea three years ago: Doing trades in mutual-fund shares that other investors didn't have the connections to pull off.

Stern, 38, was running the family business's hedge fund while his big brother, Emanuel, took charge of a real-estate operation with 200 buildings. He and the family fund were about to become one of the few winners in one of the worst stock-market slumps in history.

Now, a months-long investigation by New York officials found the millions in profits the $700 million hedge fund made came at the expense of smaller investors.

And hundreds of e-mails, trading records and other documents released last week show fund-company officials knew the trades never should have happened, but went along anyway.

The reason was money.

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[tiber1]

1. This is a huge scandle in the making and it has happened under Bush's SEC.

Unfortunately, the mainstream media has barely mentioned a word of this. Yet this abuse could affect ten's of millions of mutual fund investors. These abouses are very similar to what was going on during the 1920's.

Why the Democratic Candidates haven't picked up on this is beyond me.


Spitzer Takes Aim at Funds
http://www.thestreet.com/_tscs/markets/matthewgoldstein/10111373.html


Spitzer's Probe Rattles the Fund Industry
http://www.thestreet.com/_tscs/funds/stephenschurr/10111567.html


A Black Eye for the Fund Industry
http://news.morningstar.com/doc/article/0,1,96092,00.html

[NNN0LHI]

2. Kind of hard to beat the house when the dealer is dealing off the bottom..

...of the deck. Real damn hard. Still have some who insist on playing. Same ones that can't walk by a game of Three Card Monty on a street corner. Sucker born every day.

Don