Pandora Jewelry which had been briefly stashed in an arizona account

Slim gains and scandals Pandora Charms turn off investors In october, the sec alleged that john whittier, principal manager of wood river partners, misrepresented to investors that he was creating a broadly diversified portfolio and that the fund would be overseen by an auditor.Instead, the sec alleges, whittier conducted no audits and amassed a position in one smallcap stock, endwave corp., equal to 65 percent of the entire Pandora Beads $265 million that the fund claimed to have under management.Through his lawyer, whittier said that he always worked in the best interests of his shareholders. The sec filed a complaint in november against mark hulsbergen Bracelets conway, founder of the $43 million hedge fund groundswell partners, alleging that the wellknown trader had defrauded clients by hiding millions in losses and misleading them about the assets in its fund.The fund, the sec says, now holds only $14 million.Conway's lawyer did not return calls. In september, the once highflying bayou group's founder, samuel israel iii, and chief financial officer, daniel marino, both pleaded guilty to mail and investment adviser fraud charges.The fund took in more than $450 million from investors, but so far investigators have been able to find only a portion, Pandora Jewelry which had been briefly stashed in an arizona account. New york university history major hakan ya lincak is perhaps the most interesting character to face fraud accusations this year.Federal prosecutors say yalincak and his mother, ayferafet yalincak, convinced investors they were buying into a group of hedge funds and yalincakcontrolled companies.But the greenwich, conn.Based adviser allegedly spent about $7 million of his investors' money on items like tiffany diamonds and a new porsche.Prosecutors say yalincak also used the money to increase his renown, donating $1.25 million of investors' money to NYU, then promising about $20 million more.He intended to have the university name several buildings in the family's honor.Both yalincak and his mother, who has a previous conviction for posing as a doctor, have pleaded not guilty to all charges.Their trials are now set for april. Running scared.Andrew sterge, who runs aj sterge investment strategies, a hedge fund specializing in derivatives based on insurance risk, says that if the number of investigations continues to climb, investors may be scared off from investing in the sector as a whole and"Invest in a stock fund or an index fund instead. " No matter what, hedge funds are likely to face increased scrutiny in the form of regulatory oversight.That could hasten their undoing, as exemption from tight regulation has long been the funds' calling card.Alfred winslow jones, a sociologist, created the first hedge fund in 1949 after researching a business article and finding out some traders were doing a lot more than buying and holding.He put their ideas together in a limited partnership to exempt it from normal regulatory control. The sec is among a group of regulators now flexing their muscle.The international organization of securities commissions, which monitors global finance, said in october that it is considering new hedge fund regulations.And connecticut, which is home to the secondhighest concentration of hedge funds in the country after new york, is studying what regulations it might impose. "The absence of federal regulation so far may open doors that would otherwise be shut,"Says connecticut attorney general richard blumenthal. "The idea that the investors are all wealthy and sophisticated and can protect themselves is no longer as true as it once was. "