Loopholes are the very essence of the hedge-fund business. The funds’ managers are incredibly adapt at finding where they exist in financial markets and then exploiting them.
Is what they do in a legally grey area, or even downright illegal?
Well, c’est la vie. Sometimes you get found out and you might have to do a spell in purdah before starting again.
Given that’s the mentality which predominates in the industry we shouldn’t really be all that surprised that it extends to the way these people conduct themselves out of the office. Such as the hedge-fund manager who dodged fares on his Oyster card by exploiting a loophole.
You probably know the story by now. There were no ticket barriers at the rural station at which he boards the train for London, so he didn’t “tap in” with his Oyster card. When he “tapped out” at Canon Street station in Central London the fare he paid represented a considerable saving on what he should have stumped up.
In total he made £42,500 from that little ruse, which is well in excess of Britain’s average wage.
Here’s the question we ought to be asking: why wasn’t this man named?
What he did with this loophole wasn’t in a legal grey area. It was simply illegal.
I once appeared as a witness in a magistrate’s court after a policeman had apprehended a fare dodger of rather lesser means while I waited for a Docklands Light Railway train for Canary Wharf. This man, however, was no City banker or hedge-fund manager. So his identity was there for anyone who cared to attend the court.
The hedge-fund fare dodger avoided this fate, and a potential avalanche of publicity that would have come with it, via a cosy “out-of-court settlement”.
A neat trick that, and only available to those with considerable means.
As for the potentially corrosive effect of that on a public already furious at the parade of bankers who wrecked the economy but were allowed to walk away with fortunes without so much as a slap on the wrist? None of those involved appear to have given it a second thought.