More Hedge Fund Fun

When disgraced hedge fund manager Bradley Ruderman was convicted of running a $44 million Ponzi scheme back in 2009, who could have thought that the damage would spread to the Hollywood elite?

Though this is the kind of story you would sooner expect to see in the gossip columns and tabloids, I think it is definitely something worth thinking about as a young Wall Street kid on the come-up. The growing witch hunt powers increasingly exercised by various regulatory agencies should have you guys thinking. It is getting to a point where glancing contact with a shady financier will get you treated like a violator of the RICO statute.

In a story similar to the Bernie Madoff New York Mets clawback scenario, Tobey Maguire is one of a dozen big names being sued for money they won in an illegal poker ring run by Ruderman.

Those poker players facing what the magazine terms “hefty” lawsuits include billionaire Alex Gores; director Nick Cassavetes; Gabe Kaplan of Welcome Back, Kotter fame; Rick Salomon, best known for his role in Paris Hilton’s sex tape; record label owner Cody Leibel; and Las Vegas entrepreneur Andrew Sasson.

So take heed the next time you sit down for a friendly poker game with your buddies. You never know which bullpen drone among you may be stealing fractions of pennies from his condo association’s bank account. So when you catch that Ace-high Flush on the river, don’t celebrate too much. You may wind up paying the winnings to some geriatric you’ve never met, half-a-decade down the line.

Though I am all in favor of punishing the guilty, I have to wonder if the powers that be are going a bit too far with this. Though I understand and have used the bankster analogy a time or two, myself…this is a bit much, isn’t it?

I love to see the Hollywood elite knocked off their perch as much as any bitterly average American. I am not quite sure that using RICO statute-like legalese to punish them is really the smartest play. Ponzi schemes, shady hedge fund managers, immoral traders and unscrupulous bankers were certainly a big part of the crisis, if not its primary causes.

Naturally, we want to dissuade anyone and everyone from associating with people who broke the law in the past or may in the future. That said, the populism has to chill out itself. This sort of action doesn’t change anything for the better.

Whether courts should be expanding the scope of illegal activity to every aspect of those person’s lives is a very tricky question leading to the proverbially abused slippery slope. We certainly want to embarrass and make an example of criminals, especially the white collar sort. But in this case, I am going to have to adopt the role of the 13 year old fan boy and cry “Let Tooooobey Goooooo!”

After all, being a rich dude who dresses up like comic book characters for a very very good living should not preclude you from spending that money in a stupid and slightly illegal way. O wait…did I just contradict myself? There is sure to be lots of that going around if we start treating everyone who comes in contact with a scumbag as if they themselves are one.