A hedge funder was caught mispricing trading positions by cutting and pasting different figures in his statements to hide lower valued assets in the funds he managed.
The hedge fund, BlueBay Asset Management, uses an independent valuation process, so the broker was able to simply snatch higher values and paste them over the values of the assets in the funds he managed.
He ended up increasing the value of his funds’ assets by $27 million in three months (July, August and September 2008), causing Bluebay to pay some of its clients $650,000 more than it should have. BlueBay plans to swallow that cost rather than ask for the money back.
According to the Guardian, the FSA charged Simon Treacher, the former BlueBay broker, with deliberately inflating the value of trading positions and charged him £200,000 (which has since been reduced 30% because he “understands” what he did.)