Although her bosses at Canary Capital characterized market timing and late trading as mere “skimming,” hedge fund manager Noreen Harrington said she thought it was “grand larceny” and decided to blow the whistle because she knew it was harming individual investors, the Edmonton Journal reports.
Certainly, stepping forward was a brave move for Harrington. She had a difficult time finding work for years and even had to be escorted by armed guards.
“Pride is one reason why I stepped up,” Harrington, now a managing partner with hedge fund Alternative Institutional Partners, said in a speech before the Edmonton CFA Society.
“I wanted to be respected,” Harrington added. “When you say you’re in money management or you worked on Wall Street or you’re in the hedge fund business, you do not want to have somebody look at you as if you’re a dishonest person.”
The second main reason Harrington stepped forward, she said, is because “in this industry, we deal with huge numbers. A lot of times it’s not very human. You forget that it represents the firemen and the teachers, and the money we manage is their life’s work.”
Harrington said she caught wind of the misdeeds and illegal trading when she saw outsized returns in a fund run by Edward Stern. He told Harrington that if the regulators were to figure out what he was doing, he would “hand over the mutual fund companies,” which she called “an exit strategy.”
“It’s difficult to report a crime,” Harrington said. “They make you feel like a criminal—why are you here, how could somebody do this, why would a family like the Sterns [with $3 billion] ever do this, why would the industry allow it? It took me blackboard sessions to explain to lawyers, in layman’s terms, how this crime took place.”