Koinonia Kingdom Club - Hedge Fund- Alice in Wonderland
I am a simple person, black isn't white, 0 isn't 1, and losses aren't gains. But apparently in the complicated world of hedge funds, I would fail. As reported by the SEC, November 14th, 2006, Kelsey L. Garman, Koinonia Investment Club II, Koinonia Income Account, had a very different view about what losses were.
"In its complaint, the Commission alleged that Garman falsely claimed to have had spectacular success trading securities on behalf of the four other defendants, Koinonia 100/200, Koinonia Investment Club, II, Koinonia Kingdom Club and Koinonia Income Account, when in fact the funds as a whole had losses rather than the gains he touted. Garman was charged with violating the antifraud provisions of the federal securities laws, the securities registration provisions and the antifraud provisions of the Investment Advisers Act."
If I write a cheque that turns up NSF, I don't have funds in that account, that amount of time it takes to notify me is about 10 days.
But the SEC is saying that someone can essentially write NSF cheques to their hedge fund clients for several years without anyone knowing about it.
I understand that it is much more difficult to steal cheques these days because of the anti-fraud steps taken by banks. Frank Abagnale would be proud of the many new anti-fraud steps taken with respect to replicating and stealing cheques.
But why on earth are we allowing the custodial institution's statements to be circumvented, and have losses reported as gains. Surely, we want more from the investment market than Queen of Hearts in Alice in Wonderland reporting -where something is true just because the Queen of Hearts said so.
Could we please have reporting statements that cannot be faked up? It is surely not to much to ask.
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