Recommended Reading List

RESEARCH PAPERS (in reverse order of published date):

  • BROWN, et al, “Trust and Delegation”, NYU Working Paper Series, April 16, 2011
  • BROWN, et al, “Estimating Operational Risk for Hedge Funds: The ω-Score”, Yale ICF Working Paper No. 08-08, May 2008
  • BROWN, et al, “Hedgge Fund Due Diligence: A Source of Alpha in a Hedge Fund Portfolio Strategy”, NYU Working Paper No. FIN-07-032, Jan 2008
  • CAGAN, Penny, “Operational risk red flags: Lessons learned from ten hedge fund blow-ups”, Journal of Securities Operations & Custody, Sep 6, 2007

BOOKS (by last name):

LAWSON, Guy, “Octopus: Sam Israel, the Secret Market, and Wall Street’s Wildest Con”, Random House Digital, Inc., 2012

  • The author did a good job to put this complicated story in a very readable way, based on interviews with Bayou’s Sam Israel and his intense research on this topic. The first part of this book, which describes how Sam Israel got into the mess, seems to be very close to the reality and helps you to understand psychology of fraudsters. You can make your own judgment whether Octopus really exists.

HOMM, Florian, “Rogue Financier: The Adventures of an Estranged Capitalist”, FinanzBuch Verlag, 2012

  • This is a rare book written by a fraudster by himself (originally in German). I don’t know whether the story is true or not, it is still interesting to see his version of the episode (especially if you had a chance to meet him in person).

 JOHNSON, Bruce, “The Hedge Fund Fraud Casebook”, Wiley, 2010

  • The author took an effort to work on a very comprehensive survey of hedge fund fraud including 100 chronological fraud cases. Impressive contents should be beneficial for those who wish to know the development of hedge fund fraud history.

 SHAIN, Randy, “Hedge Fund Due Diligence”, John Wiley & Son, Inc., 2008

  • An exceptional book, which explains very useful techniques and tools for background investigation. You will be worried if Shain can keep his business after sharing so many “secret recipes” of background checks.

SHARFMAN, Jason, “Hedge Fund Operational Due Diligence – Understanding the Risks”, John Wiley & Son, Inc., 2009

  • Anyone who conducts operational due diligence should read this book and learn from Sharfman’s deep insights and rich experiences. The book lists many unique examples, which practitioners should face at some point of his or her career.  It also helps you to build a framework how to implement findings from operational due diligence into the final decision making.

BLOGS:

Due Diligence Review Corp (http://www.diligencereviewcorp.com/)

Teri Buhl’s Wall Street Unplugged: The News They left Out (http://www.teribuhl.com/)

  • Teri is a Hercule Poirot in the hedge fund industry today, who chases bad actors one after another. She has a very unique and valuable network and information source to identify hedge fund frauds much earlier than most of investors realize they are in a big trouble.

 

OTHER WEBSITE:

Greenwich Roundtable – Best Practices (www.greenwichroundtable.org/best-practices)

AIMA – Industry Guide