Wednesday, May 6, 2009

This is Harsh

It looks like the SEC wants the guys who busted their money market fund, Primary Reserve, to do some jail time. They were charged with fraud yesterday.

"Senior officials of the $63bn US money market fund whose implosion last September helped deepen the global financial crisis were charged with fraud on Tuesday by the Securities and Exchange Commission.

The SEC’s civil fraud complaint said: “Over a two-day period ... defendants engaged in a systematic campaign to deceive the investing public into believing that the Primary fund ... was safe and secure despite its substantial Lehman holdings.”"

It is important to note that while fraud, if proven, is bad for sure, investors in this case weren't actually hurt that badly. They lost about 3 cents on the dollar. Maybe the SEC can wrap this up quickly and go after some real bad guys.

No comments: