et’s face it, many law-abiding hedge fund managers (a new-age oxymoron?) are feeling a wee bit giddy lately with the news about Raj Rajaratnam’s conviction, and the stories that federal investigators are looking into trades made in an account run by Steven Cohen at SAC Capital Advisors. In fact, I sit on a trading desk where most of the traders have expressed little or no compassion for either billionaires like Raj or Steve Cohen, or little fish like Zvi Goffer and Mike Kimelman who have been rounded up in Preet Bharara’s ever expanding insider trade net. The truth is, I have heard quite a few comments such as “it’s about time”, “I hope they all rot in prison”, and more than a few “don’t do the crime if you can’t serve the time” comments. I never realised how many people watched Baretta!
Why are so many people deriving such perverse pleasure from the misfortunes of our hedge fund brethren? After all, many of these people are philanthropists with wonderful families, and some may not be guilty of any wrongdoing whatsoever. Doesn’t anybody believe in the legal principle “innocent until proven guilty”? Where is the love? With every arrest, it seems to me that years of envy are transformed into righteous indignation, as honest and hard working traders increasingly revel in the plight of the guilty and the accused. The Germans have a word for what we are witnessing (the Germans seem to have a word for everything) – Schadenfreude.
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