Hedge Fund Legitimacy

As some of you might have heard, Samuel Israel bilked investors for $400M in a ponzi-scheme posing as a hedge fund.  He recently faked his own death only days before he was due to begin his 20-year jail sentence.  He’s on the run and considered armed and dangerous.

His victims could’ve protected themselves if they’d only looked out for a few red flags:

His business card has an AOL email address.

Obviously, that’s only the tip of the iceberg.

When investing in hedge funds, you should demand professional quarterly audits to confirm the performance claimed by the manager, and you should call the auditor to confirm the numbers given to you by the fund are accurate.  Also, have your lawyer scrutinize the offering document and add considerations to protect you against fraud.

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