April 15, 2008
Israel, Founder of Bayou Group, a Hedge Fund, Goes to Jail
Samuel Israel, III, the co-founder of a hedge fund, Bayou Group, was sentenced to 20 years in prison two days ago. His Connecticut based hedge fund took $400 from investors and lied to them about profits and losses. They fabricated financial statements and siphoned money off in a phone brokerage operation. Co-founder James G. Marquez was sentenced to four years and three months in prison. The failure of Bayou in 2005 was one of the events fueling an outcry among commentators and academics for more regulation of hedge fund operations. Seems like a 20 year prison sentence ought to be sobering enough.
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