Update from Karen the Supertrader

Pekelo said:
If she never lost money for investors she must have the worst lawyers in history.
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I understand the customers made money but not as much as would have been possible because of a bit questionable fees charged by Karen.

Karen also says she had not a required number of expensive lawyers to fight with the authorities. So maybe you are right.

Karen isn't a young girl anymore so maybe it was just a best thing to accept the situation and keep the money than making some lawyers rich ;) She can still trade her own money.

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Just thinking is it how usual big companies does the same thing but not sued because they are a part of the "system".

I mean if retail level funds are doing this it's a no-no.
 
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OK, the BS has to stop now...

topdog said:
1.I understand the customers made money but not as much as would have been possible because of a bit questionable fees charged by Karen.

2.Karen also says she had not a required number of expensive lawyers to fight with the authorities. So maybe you are right.
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1. Total BS. Some investors lost money. What she did was old fashioned fraud.
2. You are telling me a successful HF manager with 400MM AUM has not enough money for lawyers? Horseshit...

Why don't you read the court papers, they are online and decide for yourself?
 
Pekelo said:
OK, the BS has to stop now...
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Okay. Then please show us the point where the court papers says the investors lost money.

I am not able to see it.

Please do not get angry Im just trying to understand the situation.

How I still see this they just didn't get as much as it would have been possible because of those questionable fees. From this point of view the customers lost some money.
 
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Why don't you read the court papers, they are online and decide for yourself?
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I was actually going to ask you guys about that. Usually this legal stuff is docuted somewhere online for the public to see the actual charges, etc.

Over here it's mandatory, even for small-time stuff like a Financial Advisor of Royal Bank of Canada that caused a client here or there to move into risky assets and lose 30%.


In any case... from what I remember hearing ages ago (and I am not sure it was official). There were two things....

#1 Losses were simply being pushed forward (rolled), and not properly recorded as such.
#2 Customers were improperly charged more trading fees than they should have.

And then there was all this talk about a partial-blow-up. But... then I hear rumors she didn't lose any customer's money so who knows.

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Before that came to a shit-show, I do remember youtube channels popping up with Guru's all trying to decode her super trading-style... like it was some hidden self-perpetual money-making machine, and if they just imitated her secret method, everyone would get rich.

On the flip side... a lot of people were (rightfully so) concluding that she was headed to a blow-up Cordier/Niederhoffer style.
 
Also, I already asked the relevant questions, that no interviewer asks:

Pekelo said:
I will speed watch the video later, but maybe Bobby can answer these questions, these are the ones I always wanted to ask her:

1. Why did she choose her unusual fee structure for a HF, that was tied to highwater marks, instead of the industry standard 2% + 20%? The highwater mark almost forced her to tinker with the books. Had she gone with normal fees, she would be still advising, IMHO.

2. Was she aware of the Yahoo group using her strategy? Maybe not, but if yes, why didn't she hire some of the guys or at least brainstormed with them? They were wildly successful using the same strategy. "Discovering" something is one thing, perfecting it is another.

3. What caused her to start the funky accounting? At the time it started there was no big market movement what would have caused a big loss or drawdown, so I didn't see the need for it? I am still baffled nobody asked this...

4. Once the funky accounting started, what was her endgame? Did she hope that she could trade herself back to profitability? The problem of the funky accounting was that it tied money up, but it didn't generate profits, thus there was no capital available to generate profits.

So Bobby, do you have an insight into these?
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Pekelo said:
I am getting old, I may die some day, so I will pass down a secret, the secret of googling successfully a topic...
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The question was not where can I find the documents. The question was where is the information in these documents what says her customers didn't make money when investing her fund.

What I see is only a questionable fees she was charging. Investors still made money after the fees.

Of course it's wrong to charge fees if there is no real profits on the table no matter your customer makes money or not. So I think it was just a right decision from the court to ban her business.

Peace.
 
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topdog said:
The question was not where can I find the documents. The question was where is the information in these documents what says her customers didn't make money when investing her fund.
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So pointing to the pdf isn't enough, I have to read it for you?? I am such a sweetheart:

From the first link, page 5, close to the top:

"The HI Fund had unrealized losses of between $3 million and $62 million at the end of every month for at least the two years before the May 31, 2016, commencement of SEC v. Bruton. Hope Advisors charged the HI Fund incentive fees every month in 2014 and 2015. After Hope Advisors caused HDB to realize more than $30 million in losses in the summer of 2015, it ceased collecting incentive fees from HDB.

In October and November 2014, the funds experienced significant trading losses due to volatility in the financial markets. "

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Furthermore, this is what causes you to get confused, she was basically running a ponzi. Second link, page 24:

"Consequently, redeeming investors get a windfall, while the pro rata share of the unrealized losses to the remaining investors increases."

This is the pure definition of a ponzi, early customers get paid, late comers get stuck with losses.

"the Fund does not inform new investors that the value of their investments are subject to immediate reduction as a result of their being saddled with a pro rata share of large unrealized losses."
 
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Pekelo said:
So pointing to the pdf isn't enough, I have to read it for you?? I am such a sweetheart:
From the first link, page 5, close to the top:
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Thank you.

It doesn't mean that the investors automatically loses money if the fund incur losses. This could be the situation while in the video comments Michael Sartain says: "Karen never committed fraud. She was never convicted of fraud. She made her clients money" and "Her clients DID NOT lose money."

But as I said I can see and agree the fund did things which are questionable. I also agree that Ponzi possibility with you.
 
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Another video surfaced, a bit hard to watch, he talks too fast, she talks too slow. Full of lies again. I don't get it with these interviewers, why is it so hard to be critical and not to believe everything she says?


Lies spotted:

- there is no gag order
- she didn't retire, she was banned
- the SEC didn't come after her, no witch hunt
- she didn't have enough money to hire good lawyers (seriously?)
 
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