The most recent reminder of the vast gulf in safety between tightly regulated Registered Investment Advisors such as our Camarda Financial and the shadowy wild-west world of hedge funds has come to a heartbreaking head in Atlanta, where it seems all too probable that International Management Associates’ Mr. Kirk S. Wright has absconded with some $115M to $185M of his clients’ money; two years of investigation have yielded little more than smoldering remains in the form of $150K (the rest of the hundred-million-plus seems to have vanished) and a history of an extraordinarily lavish lifestyle on the part of Mr. Wright, who so far has eluded custody.  Along the way, Mr. Wright – who sports a Harvard degree in public administration but no financial training – appears to have conjured performance numbers out of whole cloth, and fabricated fraudulent account statements showing mounting balances where none in fact existed. The lesson, of course, is that while hedge funds for the most part are honest (though extremely risky), and legitimate investment vehicles, they are lightly regulated (this is changing, but not enough) because they are intended for “qualified investors” and so expected to be used by those schooled enough in financial matters to see through to the webs of such as Mr. Wright.  This is too-infrequently the case, and the public would be wise to tread carefully around these things.  I am reminded of another case where a local (and honest, I believe) fellow came to us looking to have Camarda take over his small hedge fund (we declined) so he could move on to other things; we were astonished, as we went through our due diligence, to find that because of his small size (several millions only) the state of Florida considered him “exempt” and did not regulate him at all!