1. Discussion Finding Bernie Madoff: Detecting Fraud by Investment Managers Philip Hamill

2. Where is Bernie?  D&G in 98 th Percentile for felony risk.  Federal Correction Complex, Butler, North Carolina, Prisoner Number #61727-054.  Projected release date: 14 th November 2139

3.  Is this research interesting? Yes.  Is this research Important? YES! – significant policy implications  Fund Management literature focuses on performance.  Limited literature on predicting fraud & other operational risks.

4. Can the predictive power be improved?  Gil-Bazo & Ruiz-Verdú (2008) JEBO: High performance lower fees.  Gil-Bazo & Ruiz-Verdú (2009)JF: (-) relationship between fees & risk-adjusted performance!!!  Chen et al (2004) AER: Fund size, performance, liquidity and organisational structure.  Use Cahart’s alpha – lagged/cumulative performance important?  CCO CFA variable?