Hedge Fund Ethics Hotline Available

The firm said implementing the Ethics Hotline at hedge funds is a way to prevent fraud, insider trading and other forms of wrongdoing and show pension funds, fund-of-funds (FOFs) and other investors that hedge funds, like other firms, strive for ethical transparency.  

The Ethics Hotline allows employees and others to anonymously report illegal or unethical behavior via telephone or email. The complaints are then vetted by Corporate Resolutions and the findings are discussed with the firm and/or outside counsel to determine the legitimacy of the complaint and what necessary actions need to be taken.   

According to the announcement, hedge funds may consider retaining the Ethics Hotline services through outside counsel potentially for privilege purposes.   

“The Ethics Hotline gives investors, hedge fund managers and others a proactive approach to minimizing the vulnerability of fraud and sends a message to employees and future investors that the firm is committed to maintaining ethical business practices,” said Kenneth S. Springer, a former FBI agent and President and Founder of Corporate Resolutions Inc., in the announcement.  

Hedge funds have received negative exposure with the Securities and Exchange Commission’s accusations of insider trading (see SEC Snags More in Galleon Insider Trading Scandal).