5 October 2012, by Jonathan Weil (Bloomberg)


Excerpt:

As if America’s hedge-fund elite didn’t have enough crises to worry about -- riots in Spain, the fiscal cliff, Lindsay Lohan’s hotel brawl -- the parade of underlings copping pleas to insider-trading crimes just keeps growing. Every week it seems another one flips, promising to turn state’s evidence.

Time is money, as they say. And it would take a true genius to make money out of the kind of time some of these people are facing.

Still, you don’t get to work at a $14 billion hedge fund like SAC Capital Advisors without abundant self-confidence and inner drive.

So if you are someone like Jon Horvath, now isn’t the time to give up on your dreams, just because you face the prospect of years in the slammer.

Horvath, 42, is the former SAC analyst who pleaded guilty last week to securities-fraud charges after admitting to participating in an insider-trading ring.

Soon he will probably join former Galleon Group kingpin Raj Rajaratnam and dozens of other recently convicted hedge-fund masters and tipsters now populating America’s minimum-security prisons.

We can imagine what the fittest among them might be thinking: “Now that I’m truly on the inside, how can I use this opportunity to make as much money as I did on the outside?”

Perhaps the greatest profits could go to those with the longest sentences. Call this the ultimate lockup agreement. bloomberg.com/