Our recent post on the "SEC's dirty laundry" made reference to "prospectus creep", or the tendency for hedge fund attorneys to add ever more disclaimers and "flexibility" to hedge fund offering documents.
We came across a letter in the current edition of the Economist that makes the point so well that we wanted to quickly repeat it:
"Certain assertions in your article on transparency in financial markets deserve to be reconsidered (Economics focus, February 21st). You describe transparency as amorphous, criticise it as costly and say it takes second place to trust in the money markets. It is hardly surprising that shortcomings may arise from inaccurate, immaterial and incomparable publicly available information, but transparency as a principle cannot be blamed. A hefty prospectus veiled in legal jargon should not be considered a transparent tool of disclosure; it is a means of obfuscation."
Exactly.
Hedge Fund Operational Due Diligence
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