Trust and Delegation

Discussion in 'P2.T8. Investment Management (15%)' started by EIA, May 10, 2012.

  1. EIA

    EIA Member

    Hi David,

    Explain how past regulatory and legal problems with hedge fund reporting relates to expected future operational events.
    2012 FRM Risk & Investment Management 8.e Brown, Trust & Delegation

    •We find that funds with legal and regulatory problems have poor operational controls.
    –Problem funds are less likely to have independent pricing.
    –Problem funds are more likely to have switched vendors in the last three years. (…changing vendors may be a red flag as the fund may have been dropped by the vendor due to data inconsistency.)
    Finally, problem funds are less likely to have a major auditor. We would expect that reputational concerns would lead major auditors to be

    The highlighted sentence is not complete. What is the completed sentence?


  2. David Harper CFA FRM CIPM

    David Harper CFA FRM CIPM David Harper CFA FRM (test)

    Hi BR,

    Sorry (I wish my only errors were such fragments, how sweet would that be!). Should be "... lead major auditors to be reluctant to accept such funds as clients."

    From the reading:
  3. RiskNoob

    RiskNoob Active Member

    Other than one incomplete sentence from the above, David did a great job summarizing the lengthy article into two pages while capturing all points from the AIM... ::)

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