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Gave birth to the financial reform law Wall Street hedge fund scam six older cattle

Gave birth to the financial reform law Wall Street hedge fund scam six older cattle

Wall Street has had a number of financial crises throughout history.  Especially in the last ten years, due to the early United States authorities ' lax regulation of hedge funds, leading to the two biggest hedge fund fraud in Wall Street history, that is, "madoff scams" and founder of Galleon group fraud scandal.

the two cases shocked the world, caught up in the subprime crisis of United States financial woes. In July 2010, in order to strengthen the supervision of hedge funds, United States authorities issued new financial reform bill.  Meanwhile, with the subprime mortgage crisis is drawing to a close, United States stock markets also have continued to the present, the six-year bull market.

scam exposure caused by the subprime crisis

from 2007 year, subprime mortgage crisis led investors to become familiar to the crisis is not to blame. But Wall Street veterans-the former NASDAQ Chairman Bernard madoff exposed the fraud scandal was still shocked the world.  The scandal ultimately involve amounts of up to $ 50 billion, by far the biggest scam in Wall Street history.

the 90 's of the last century, as NASDAQ Chairman Bernard madoff, to borrow his madoff securities asset management was established as a company, and through the network to raise money for the company. But the essence of madoff gains commitment is just a giant "Ponzi scheme", all proceeds returned to the old customers come from adding more new customers.

due to the fear that the financial crisis pose risks to the gains, more and more investors to return madoff investments.  The end of 2008, has been unable to pay investor redemptions madoff confessed to two sons, the Fund is simply not as he boasted that money, it's all just a hoax.

the night of December 10, 2008, Bernard madoff's son denounced. The next day, madoff was arrested for suspected $ 50 billion fraud. Let the sob in the world is, which lasted for 20 years, the amount of up to us $ 50 billion fraud victims, including Spain's Santander Bank, the International Olympic Committee, Japan more than more than 30 professional bodies, such as Nomura Securities. Court ordered the confiscation of madoff property of $ 17 million, will also be turned over to the more than 80 million dollars in assets under madoff's wife.  Local time on June 29, 2009 madoff was sentenced to 150 years in prison.

madoff was sentenced to four months, Wall Street and revealed another alarming global hedge fund insider-trading case.  This leads into the United States the largest hedge fund Galleon Group (Galleon Group) founder, Raj rajaratnam.  

according to the Southern District of New York federal courts and the United States Federal Bureau of investigation in court papers, rajaratnam was charged in January 2006 to October 2008, and other suspects in insider information, transactions such as Polycom, Hilton hotels and Google shares in listed companies, the illicit profit of $ 63.8 million.  

November 16, 2011, was sentenced to 11 years in prison for rajaratnam; return $ 53.8 million in ill-gotten gains and pay a fine of 10 million dollars.  

new rules focused on strengthening the letter PHI regulation

madoff scam and the Galleon group insider trading case, and the United States Federal Bureau of investigation for a number of hedge funds insider-trading probe, makes the finance profession began to rethink has been advocated to reduce regulatory "free spirit".  

in July 2010, the United States President Barack Obama formally signed by the House and Senate passed the Dodd-Frank Wall Street reform and Consumer Protection Act, which is a new United States financial-reform bill.  

the Bill explicitly demanded that the assets of more than $ 150 million hedge fund need to SEC registration and supervision, and have the obligation to provide the regulatory agencies relating to asset size and category, counterparty credit risk, transactions, investors contract and other regulators consider the need to provide additional information and data.

overall, the United States hedge funds face regulation changes, mainly reflected in the level of information disclosure.  Some key elements of the operation of the Fund, such as short selling, leverage and not subject to substantial restrictions.

worth noting is that madoff was sentenced after 7 days, p 500 after a short adjustment, which opened a rebound for quite some time.  July 13, 2009 – January 19, p 500 rose 30.84%, and reached a stage of 1150.45 high in the January 19.

this trend also stocks the other two benchmark indices. June 30, 2009 ~ 10th, the Dow Jones industrial average fell 4.49% in a row. July 13, 2009 – January 20, the index soared up 30.16%, also reached a stage 10729.89 for the January 20 high.  The NASDAQ index rebounded on July 10, 2009 to January 19, 2010, up 32.14%.

in addition, recover from the subprime crisis of United States capital markets from March 2009, opening a six-year slow cow.