Hedge funds have to be kept honest
Light me up, goes the phrase on Wall Street. It is uttered to the sales people and traders at investment banks by hedge fund traders who are desperate to justify their high fees by gaining an edge in markets.
You can light up a hedge fund in a few ways. By giving it a trading idea or a piece of research that helps it to make money. By giving it first refusal on a sale of securities. Or, best of all from the perspective of alpha - the exceptional return that hedge funds seek to achieve - by giving it inside information about something that is likely to move markets.
Trading on the last is, of course, against the rules and the law in most countries. By placing its order before share and bond prices change, a fund illicitly takes money away from other investors, even if it feels like a victimless crime. Traders at hedge funds often put intense pressure on bankers to gain scraps of knowledge, but few who abuse inside information get caught and punished.
To stop them would require greater resolve from regulators, hedge funds and the banks with which they deal. Regulators would have to mete out harsher punishment, hedge funds would have to police themselves more seriously and banks would have to be willing to sacrifice potential revenues by cutting off transgressors.
In the absence of that, inside information will keep being abused by some hedge fund traders. The UK Financial Services Authority observed last year that prices often move before banks execute trades. Hedge funds, it said, are "pushing the boundaries of acceptable practice". Last week, it said there were signs of insider trading before 29 per cent of UK mergers and acquisitions announcements.
Inside information has always been leaked by crooked people to others for a profit. What makes hedge funds any more prone to it than others? Well, most crimes are committed by people who have a strong motive and a good opportunity to defy the risk of being caught. Hedge funds, particularly big ones, meet both of the criteria.
The hedge funds' motive is that they must get ahead of the crowd to survive. They can only command fees of 2 per cent of funds under management plus 20 per cent or more of profits by doing so. But competition is tougher and markets less friendly towards hedge fund investment styles such as short-selling and convertible arbitrage than in the past.
Hedge funds have the opportunity because of their closeness to banks that hold confidential information and their value as clients. Many hedge fund managers used to work at banks and some banks invest in their funds. Hedge funds that trade heavily also contribute a lot financially: a big hedge fund may spend more than $200m a year in commissions.
This does not mean most, or even a lot of, hedge funds blatantly exploit inside information for profit. Plenty are run by managers who are more skilled and experienced than the average investor. Banks have learnt by experience to be tough in policing the flow of data. All phone calls from trading floors are recorded and there are strict rules on how their staff handle inside information.
But there are still grey areas. One of these was exposed by the FSA's inquiry into Philippe Jabre, a partner in GLG Partners, one of the biggest London hedge funds. Mr Jabre was fined ￡750,000 (�1.1m) by the FSA this month for market abuse by dealing in securities of Sumitomo, the Japanese bank, after being sounded out about a forthcoming convertible bond issue by a Goldman Sachs broker.
There was some ambiguity in the warning Mr Jabre was given by the broker (who was cleared of blame) not to trade in Sumitomo. And the FSA has since tightened rules on trading prior to convertible bond issues. But Mr Jabre, who may appeal, could have fared worse. FSA officials wanted to fine him ￡4m but that figure was reduced by an internal panel and he will keep his trader's licence.
Maybe he deserved the benefit of the doubt but his punishment is not likely to frighten anyone else. Mr Jabre and GLG, which faces a fine of ￡750,000 for not monitoring him properly, are parting ways. Yet GLG continues in business much as before, with the backing of investment banks, and there is talk of Mr Jabre being able to raise plenty of money for a new fund if he wishes.
Surely Mr Jabre and GLG, who can easily afford ￡750,000, should suffer more than this, if only to discourage others from doing worse? It is clear they are not the only offenders in the industry. The FSA is examining whether funds misuse information they gain about convertible bond issues or on creditors' committees of troubled companies. In the US, the Securities and Exchange Commission has already fined a number of hedge funds for such abuses.
But regulators cannot catch each wrongdoer at thousands of hedge funds (in the US, funds are only now having to register with the SEC). They need the funds to impose stricter controls and not to tolerate rule-bending by traders. If hedge funds believed they would be frozen out by banks if they allowed traders to gain from inside information, attitudes would soon change.
Perhaps Japan, where institutions that are disciplined by regulators even for minor offences face boycotts by others, takes market self-discipline a bit too far. But London and New York could do with more of it. At the moment, incentives and opportunities to misbehave are far greater than the risks of doing so. Everyone but the dishonest loses by allowing that imbalance to persist.
应姑息违规对冲基金
借我双慧眼吧！”华尔街有这么句话。这是对冲基金交易员对投资银行的销售人员和交易员所说的。对冲基金交易员拼命想在市场上领先一步，以证明他们的高收费是有道理的。
你可以用几种方式“借给”对冲基金“一双慧眼”：给它一个交易点子或一篇能帮它赚钱的研究报告；在一次证券出售中给它优先取舍权；或者最好是从阿尔法系数的角度，给它很可能会推动市场走势的内幕信息。(阿尔法系数指的是对冲基金追求的超常回报。)
当然，利用最后一种情况进行交易是违反多数国家的法律法规的。基金通过在股票和债券价格变化前下单，就非法抢走了其他投资者的钱，即使整个过程让人感觉是一起没有受害人的罪行。为了得到些许消息，对冲基金交易员往往会对银行家施加强大压力，但因滥用内幕消息而被抓受罚的人却寥寥无几。
要阻止他们的这种行为，就需要监管机构、对冲基金以及他们打交道的银行下更大的决心。监管机构必须给予更严厉的惩罚；对冲基金必须对自身进行更认真的约束和管理；银行必须心甘情愿地牺牲潜在营收，开除违法乱纪者。
如若不然，某些对冲基金交易员仍将继续滥用内幕消息。英国金融服务管理局(FSA)去年指出，在银行执行交易前，价格往往就会变动。它表示，对冲基金“在试探可接受行为的底线”。上周它表示，在英国29%的并购交易对外宣布前，都有内幕交易的迹象。
内幕消息总是被狡诈之人泄露出来牟取私利。是什么让对冲基金比其它行业更想得到内幕消息呢？在大多数情况下，犯罪的人都有强烈动机，并且有很大的几率不被抓到。对冲基金，特别是大型对冲基金，符合这两个条件。
对冲基金的动机是：它们必须超群出众才能生存。只有这样，它们才能对名下资金收取2%的管理费，再加上20%或更大比例的利润提成。但相比过去，现在的竞争更加激烈，而市场对对冲基金卖空和可转债套利之类的投资手法则不那么有利。
由于对冲基金可以接近掌握机密消息的银行，而且本身也有作为银行客户的价值，所以它们都有这种机会。许多对冲基金经理人过去都在银行工作，有些银行就在他们的基金投资。交易量庞大的对冲基金在财务上也对银行做出很大贡献：一家大型对冲基金每年的佣金支出就可能超过2亿美元。
这并不是说，大多数(甚至是许多)对冲基金明目张胆地利用内幕消息赚取利润。相比普通投资者，许多对冲基金经理人都比较有技巧且经验较丰富。银行都从经验中学会了在监视数据流方面不松懈。所有从交易场内打来的电话都会被录音，在员工处理内幕信息方面也有严格规定。
但仍然存在灰色地带。金融服务管理局对菲利普?贾布里(Philippe Jabre)的审查就暴露了一个。菲利普是伦敦最大的对冲基金之一GLG Partners的合伙人。贾布里先生本月被金融服务管理局罚款75万英镑，原因是他在交易日本住友银行(Sumitomo)的证券时，存在市场违规行为，之前他从高盛(Goldman Sachs)的一名经纪人身上打探出了住友银行即将进行可转债发行的相关消息。
这名经纪人(被免于责罚)警告贾布里先生不要交易住友银行的证券，但他的警告颇为含糊。此后，金融服务管理局收紧了有关可转债发行前交易的规则。贾布里先生可以上诉，但他原来面对的结果可能更糟。金融服务管理局官员本想对他处以400万英镑罚款，但一个内部小组减少了这一数字，他还可以保留交易员执照。
也许他值得假定无罪，但对他的惩罚不可能吓倒其他任何人。贾布里先生和GLG公司已经分道扬镳，该公司因未对他进行适当监管而面临75万英镑罚款。但在投资银行的支持下，GLG公司的业务仍一如既往，而且还存在一种说法，称如果贾布里先生愿意的话，他有能力募到大量资金。
当然，就算为了阻止其他人更为恶劣的行为，贾布里先生和GLG公司也应当被罚得更重些？显然他们有能力轻松负担75万英镑罚款。显然他们不是这个行业里唯一的违法者。英国金融服务管理局正在调查基金公司是否滥用所获得的、有关可转债发行或问题公司债权人委员会的信息。在美国，证券交易委员会(SEC)已因此类行为惩罚了大量对冲基金。
但对冲基金数以千计，监管者无法逮住每一个违法者(在美国，直到现在对冲基金才必须在证交会注册)。他们要求这些基金执行更严格的控制，不姑息宽容交易员的违规行为。如果对冲基金确信它们允许交易员通过内幕消息获利就会被银行逼迫出局，它们的态度很快会改变。
在日本市场上，机构哪怕有轻微的违规行为而受监管部门惩戒，都将面临其它机构的抵制。这一自我约束也许有些过了头，但伦敦和纽约则可以在这方面多做些工作。目前，舞弊行为的动机和机会远比风险来得大。如果允许这种不平衡继续存在下去，所有人都将遭受损失，只有不老实的人除外。
