God bless Seth and his family. One of the good guys is gone....
<i>Circling the Wagons
Circle T Partners CIO Seth Tobias says he will personally reimburse investors for losses incurred during a mini-rogue trading scandal
Seth Tobias, CIO at Circle T Partners, has vowed to personally reimburse investors after a recent mini-rogue trading scandal at the firm -- an execution-only trader was found to have four unauthorized positions, leading to an estimated $12 million loss -- but don't expect the episode to end that neatly. "Let me put it this way," Tobias says. "I have been in the business for a long time, and I've seen a lot of things. But when I saw this, I really took a step back."
Regulators are equally miffed and are still looking into how the trader, Ethan Kass, son of noteworthy hedge-fund manager Doug Kass, was allegedly able to conceal the activity within the firm's flagship fund, which employs strict risk controls.
Tobias did not specifically identify Kass as the suspected rogue, but numerous press reports have. Kass no longer works at the firm. Several industry insiders say they find it highly unlikely that a junior trader could have secretly kept open positions without the assistance of someone at a clearing broker. Tobias wouldn't comment on whether he agrees with that contention, but he did say that "the trader responsible is actively working with us, and with investigators, in this [audit] process."</i>