(January 20, 2009) Press Release: Palm Beach Money Manager Investigations/ Benchmark as Lead Plaintiff in FINRA Class Action
Date: Monday, July 13 @ 23:47:58 CDT
Topic: Money Matters

Press Release Benchmark Financial Services, Inc. January 20, 2009 Lake Worth, Florida

The island of Palm Beach is being shaken to its core by revelations of a Ponzi scheme in which many of its residents invested. The socialites who were invited to invest either had few questions about how the money was actually being managed or were polite enough to not ask. Did these "sophisticated investors" have ready access to information that could have saved them? Help was closer than they imagined.

Across the bridge from the island of Palm Beach, on Federal Highway in the City of Lake Worth, Florida sits a 1920s Spanish-style yellow historic building with a discreet sign that reads, "Center for Investment Management Investigations, Benchmark Financial Services, Inc." Occasionally money management insiders passing by (who understand what the sign refers to) knock on the door to satisfy their curiosity. Yes, they are told, this is a niche firm that investigates money manager wrongdoing. An SEC registered brokerage, the firm does not deal with retail investors. Most of its clients are large pension funds located outside the state of Florida. Earlier this year Bloomberg Television filmed at the office for an Emmy Award-winning special on Hidden 401k Fees.

Founded by Edward Siedle, a former SEC attorney and Director of Compliance of one of the largest international money managers with 25 years experience in investigating money management abuses, the Center for Investment Management Investigations has accumulated a wealth of non-public information about money managers worldwide. From Guam to Puerto Rico, the firm has conducted reviews. Since the majority of established money managers have pension clients and pensions have the clout to demand that their managers disclose information beyond what is publicly available, the firm has had unique access, by virtue of representing pensions, to the secret world of money management abuses.

"Unregistered funds are especially problematic," says Siedle. "The truth is that the world of old-fashioned, long-only SEC registered investment advisers is far more treacherous than the public is aware. But when it comes to dealing with unregistered money managers, even experienced fiduciaries to the nation's largest pensions struggle. We recently completed an investigation of a fund of funds of funds scheme involving over a hundred unregistered hedge funds. Show me an investor who's sophisticated enough to understand what's going on there."

Due diligence services related to hedge and other alternative funds, such as those provided by fund-of-fund operators, have fallen into disrepute as the number of these scams grows. The hefty fees these fund of funds charge are difficult to justify given the performance. At the other end of the spectrum, online fund background intelligence is generally superficial. "The Madoff scandal is a wake up call for all investors, including those that are pleased with their supposed investment results. Given what Benchmark has learned over the years about money management practices, we predict there will be many more scams surfacing soon. It is no longer considered rude to ask probing questions of those handling your assets. The challenge we face at Benchmark is providing investors with meaningful due diligence that includes non-public information in a cost-effective manner." Siedle says the firm has been asked to broaden access to its database and methodology to high net worth individuals but has not done so to date.

Benchmark Financial Services Files Suit Against FINRA

As reported in the New York Times and Bloomberg, Benchmark Financial Services Inc. has filed suit against Finra and its top officers for allegedly deceiving members of NASD -- formerly the National Association of Securities Dealers -- about terms of the merger of NASD's regulatory unit with that of the New York Stock Exchange in July 2007. The firm, a Finra member, has now twice challenged the regulator that oversees it. Siedle sued NASD in 2002 when it tried to block the publication of a book that examined and ranked the disciplinary records of member firms. "Our mission is to get information to investors that will assist them in their investment decision-making. When Finra, which is a conflicted self-regulatory organization, is deceptive in its dealings with the public, if the SEC is not willing to take action, we will."

Contact: Edward Siedle President Benchmark Financial Services, Inc. www.benchmarkalert.com (561) 202-0919

This article comes from Pension fraud Investigations, money management abuse

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