CRI Discovers Overseas Insider Trading Sanction
A fund-of-funds was looking to invest in a hedge fund led by a manager in Hong Kong. The client was impressed by the manager’s track record of high returns and asked CRI to investigate his background.
Our investigators found that the hedge fund manager did indeed have a high rate of return but noted an unexplained three-year gap in his resume from 2006 to 2008. We were able to determine that the manager was running a hedge fund in India at the time and was strictly sanctioned by the Securities and Exchange Board of India (SEBI) for insider trading. The manager had actively sought to eliminate references to his role in the events leading to the sanction.
Our client terminated its relationship with the hedge fund manager.