Here’s a sure-fire way to lose your stationery privileges. Following a stunt that makes the Bernie Madoff fraud look sophisticated, Simon Treacher, a former emerging markets manager at BlueBay Asset Management in London, has been fined £140,000 and banned from working in the City. Treacher has admitted massaging the performance figures of his £900 million hedge fund—since closed by BlueBay—by using cut-and-paste techniques to alter seven valuation documents.
Treacher (now nicknamed ‘Scissorhands’ by financial bloggers) printed genuine broker quotes valuing assets held by his fund, cut out figures and pasted new ones on the relevant valuation lines. He then copied the amended documents and submitted them as the original quotes. The combined valuation errors in July, August and September 2008 totalled $27 million, and Treacher’s actions at one point inflated the value of his fund by $11.8 million.
Treacher settled the case early and will not appeal. BlueBay alerted the Financial Services Authority to the situation, and the hedge fund firm has spent $650,000. to compensate investors.
Alden Distressed Quarterly Letter Q4 2008—Robert Murray
