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It's hard to find a better meter of the nation's Zeitgeist than "Law & Order," the NBC crime drama that's long billed itself as being "ripped from the headlines." If that tagline is to be believed, hedge funds are in dire need of PR. Viewers that tuned in to one of the season's opening episodes in early January were treated to a hedge funder who not only engineers a New York blackout to benefit power companies he owns, but in so doing, causes the kidnapping of his beautiful (of course) wife and daughter, with his wife and the salt-of-the-earth housekeeper ending up as dead as a subprime mortgage. Worse, when a confession of his hedge fund's shenanigans is the only way to secure the killers' conviction, the louse refuses because he doesn't want jail time. He relents (everyone can be redeemed) only after his teenage daughter begs Daddy to grow a backbone and not let Mommy's killers go free. Justice, at last, is served.
Da dum.
Exactly what headlines this plot is ripped from we're not sure, save for some old clippings of Enron and California blackouts. But for writers of "Law & Order," a wealthy hedge fund manager who is a greedy, scheming and cowardly creep isn't hard to envision. Let's face it -- for most people, if they think about these things at all, the hedge fund crowd and its kissing cousin, the private equity gang, are a bunch of ethically-challenged barbarians who fire workers and avoid taxes. Is murder such a stretch? On the other hand, a recent streak of ethical transgressions by members of this set hasn't served to correct this, um, negative perception. Take the media lemonade former hedge funders managed to turn into lemons a few weeks ago after The New York Times ran a glowing profile of their new venture, GiveWell, a charity that helps donors evaluate other charities. The Times praises how the pair, Holden Karnofsky and Elie Hassenfeld, left lucrative hedge fund jobs to found GiveWell for salaries of $65,000 a year. The Dec. 20 story was heartwarming enough to get picked up by New York magazine's Daily Intel blog under the headline "Hedge-funders use their skills for good, not evil." That alone tells you where hedgies rank on the respect scale. But the praise may have been premature. A subsequent post on the Intel blog on Jan. 2 -- "Hedge-funders use their skills for evil, not good" -- reported that Karnofsky had been busted by MetaFilter for setting up an alias and posting positive musings about GiveWell on message boards. Posters to MetaFilter went nuts, noting the irony that an endeavor purporting to bring transparency and honesty to philanthropies was itself engaging in opacity and dishonesty. Karnofsky soon supplied a mea culpa: "It was a lapse in judgment. It was terrible. I really hope that you can understand the difference between this mistake and running a scam." OK, nobody ended up dead -- this is not "L&O." But with explanations like that, it's no wonder hedgies are believable villains. If they're fibbing online, what else are they up to? Where do they draw the line between "mistake" and "scam"? Karnofsky wasn't the only money man recently caught engaging in online dishonesty. The Wall Street Journal reported Jan. 2 that Jide Zeitlin, a former COO of Goldman, Sachs & Co.'s investment bank, is being sued by American Tower Corp. for forwarding to investors a negative story about the company in Fortune magazine using the e-mail address of American Tower's CEO. Zeitlin, who founded a rival to American Tower and now operates Keffi Group Ltd., a private equity firm, admitted using the CEO's e-mail address but offered no further explanation. So it's still unclear what Zeitlin, who is also chairman of the Amherst College board of trustees, was hoping to accomplish. But observers didn't doubt he had something sinister up his sleeve. As Boston's Magazine's Boston Daily Blog chided, "A bit more discretion, Zeitlin, and you're not in this mess. C'mon: That's Criminal Enterprising 101." Da dum. -- Yvette Kantrow Categories Deal Video
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