How Hedge Funds Creat Criminals

[Hannah Bell]

http://blogs.hbr.org/cs/2010/12/how_hedge_funds_create_crimina.html

Hedge funds are playing the role of Wall Street villain again. This time, the charge is rampant insider trading. First came the 2009 arrest of Raj Rajaratnam, founder of the Galleon Group. Then came the November 22, 2010 raids of three hedge fund headquarters by FBI agents who seized documents and confiscated BlackBerries. Now authorities are serving subpoenas on other, larger hedge and mutual funds...

These events and allegations raise suspicion that some hedge fund traders may have succeeded at beating the market not through careful research and original analysis but allegedly by breaking the law...

My research, shows that people's circumstances affect whether they are likely to act prosocially. And some hedge funds provided the circumstances for encouraging an antisocial behavior like not obeying the laws against insider trading, according to these investigations.

Hedge funds, both individually and as a group, can send at least three powerful social signals that have been repeatedly shown in formal experiments to suppress prosocial behavior:

Signal 1: Authority Doesn't Care About Ethics.

Signal 2: Other Traders Aren't Acting Ethically.

Signal 3: Unethical Behavior Isn't Harmful.

http://blogs.hbr.org/cs/2010/12/how_hedge_funds_create_crimina.html

[xchrom]

1. recommend

[Starry Messenger]

2. k&r

[Octafish]

3. The children of Michael Milken.

K n R.