The Federal Bureau of Investigation recently made a high-profile appearance in tracking down fugitive hedge fund manager Kirk Wright, and now it appears the agency is looking to drum up some more business. Patrick Carroll, a special agent at the FBI’s white collar branch, said it welcomes complaints about hedge funds, as the industry is once again at the center of regulatory controversy. Carroll told a conference of accountants in New York, reported by Lipper HedgeWorld, that the FBI can’t do its job of cracking cases of white collar crime unless people complain – something well-heeled investors may hesitate to do as they rather not admit they were hoodwinked or just figure a little swindle comes with the territory. Carroll outlined some of the many ways hedge funds can engage in fraud – insider trading, inflated commission, false portfolio valuation and Ponzi schemes. But, he warned, the FBI can’t get its fund, if people don’t come forward with the telltale signs of such behavior. Carroll urged the accountants to be alert to possible conflicts of interest and not to be deterred by those who may try to block them from pursuing those conflicts.
