{"id":374,"date":"2007-01-25T11:25:06","date_gmt":"2007-01-25T09:25:06","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/2007\/01\/25\/offshore-hedging-increases-risk\/"},"modified":"2007-01-25T11:25:06","modified_gmt":"2007-01-25T09:25:06","slug":"offshore-hedging-increases-risk","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2007\/01\/25\/offshore-hedging-increases-risk\/","title":{"rendered":"Offshore hedging increases risk"},"content":{"rendered":"

Interesting to note that the FT<\/a> reports the following this morning:<\/p>\n

\n

Man Group's US brokerage has told a US court that a subsidiary of UBS, the Swiss bank, was partly to blame for failing to spot an alleged $179m (\u00a390m) fraud at a Philadelphia hedge fund.<\/p>\n

The Cayman Islands administration business of UBS was added last Friday as a third-party defendant to a case being brought against Man Financial by the hedge fund's receiver.<\/p>\n<\/blockquote>\n

In essence this is a case about people abusing trust to commit an alleged fraud. As the FT summarises it:<\/p>\n

The case involves the hiding of $179m of PAAM trading losses in a sub-account at Man. Clark Hodgson, the receiver, has accused Man and several of its employees led by Thomas Gilmartin, a senior vice-president, of colluding with PAAM to conceal the losses and shift the date of trades.<\/p><\/blockquote>\n

But let's be clear. The hedge fund claimed to be in Philadelphia but was operated on contract in Cayman. And UBS might be Swiss but a front company of theirs supposedly did the work on a beach in the middle of the ocean. If you will trust serious funds to such a dubious arrangement, in a location where the underlying ethos is to beat the system, what form of contributory negligence are you guilty of?<\/p>\n

And, more importantly, to what sort of risk does this sort of offshore hedging expose the whole financial community? Too much, you can bet, for it to survive a meltdown without serious consequence for real people doing real jobs to create real wealth. None of which are things with which hedge funds are well acquainted.<\/p>\n","protected":false},"excerpt":{"rendered":"

Interesting to note that the FT reports the following this morning: Man Group’s US brokerage has told a US court that a subsidiary of UBS,
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,32],"tags":[],"class_list":["post-374","post","type-post","status-publish","format-standard","hentry","category-corruption","category-tax-havens"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=374"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/374\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}