Re: BRINKS HOME SECURITY MAY HAVE DIRECT TIES WITH MADOFF

[mleuck <m.leuck@xxxxxxxxx>]

On Jun 30, 11:23=A0am, Jim Rojas <jro...@xxxxxxxxxxxx> wrote:
> noauth wrote:
> > NEW YORK (Fortune) -- Not quite rich enough and not quite smart enough,=
 a certain investing class has for years paid through the nose for what was=
 thought to be world-class money management by investing in funds that prom=
ise access to the best hedge funds.
>
> > The Bernard Madoff scandal now calls into question the value of the so-=
called fund-of-fund industry.
>
> > A fund-of-funds manager puts clients' money to work in a portfolio of h=
edge funds or other non-traditional investment vehicles.
>
> > The client gets access to accounts he wouldn't normally have access to =
but the expenses are exorbitant: often a 1% management fee and between 5% a=
nd 15% of any gains.
>
> > That might feel okay when the fund is turning in stellar performance, b=
ut not so much when they're losing money, or worse, investing in a fraud.
>
> > "The fund-of-funds community has a problem because they're a step remov=
ed from the actual investment of money," says Michael Lewitt, president of =
hedge fund Harch Capital Management. "To convince people they add value the=
y sell themselves as offering diversification, due diligence and access to =
exclusive hedge funds. The Madoff scandal hits at the heart of this model, =
and could be devastating for the industry."
>
> > Indeed, some advisors seemed to do little more than turn over most or a=
ll of their clients' money to Madoff -- money that may now be gone.
>
> > "The fact that very well respected fund-of-fund names like Fairfield Gr=
eenwich and Maxam Capital Management were funding a ponzi scheme for a peri=
od of decades blows up the raison d'etre for a fund-of-funds," said Lewitt.
>
> > Before the Madoff scandal broke, the average fund-of-funds had been str=
uggling with the same negative trends slamming the average hedge fund -- in=
vestors pulling money out, poor performance and lots of volatility.
>
> > And the average fund-of-funds is down about 19% this year, underperform=
ing hedge funds by about 2 percentage points.
>
> > "Even before these numbers came out, investors were beginning to realiz=
e that these two layers of fees made their chances of making money pretty r=
emote," said Steve Cesinger, the chief financial officer at private equity =
and real estate investment firm Dewberry Capital.
>
> > According to CNBC, Fairfield is planning to sue Madoff, claiming that i=
t was a victim of fraud and that it did due diligence and hired auditors.
>
> > "It is clear that there will be extensive litigation around this scanda=
l and that fund-of-funds managers will be exposed to that litigation," said=
 Steve Thel, a law professor at Fordham law school where he teaches securit=
ies regulation.
>
> > But Thel said such suits against funds of funds will address two main q=
uestions. First, did the fund managers conduct reasonable due diligence. An=
d second, did they disclose to investors that they were not diversified.
>
> > Given that some prominent fund-of funds turned down Madoff it's hard to=
 argue that proper research was conducted. As for whether proper disclosure=
s were made, "that's still to be discovered," said Thel.
>
> With the small budget Brinks operates on, I doubt it.
>
> Why would a company spend millions of dollars on advertising, when they
> can just lower their rates and get more client referrals that way?
>
> All they are doing is keeping rates high. Their overhead must be choking
> them beyond belief. ADT doesn't need to advertise that much, or nor do
> they resort to using scare tactics like Brinks does.
>
> Jim Rojas

Not likely, Brinks Security has been a profitable company with low
attrition for quite a while whereas ADT is currently losing more
customers through attrition than they bring on

Besides if you are a security company protection houses from burglars
how else are you going to advertise? "Brinks Security.....it's a
keypad......and.......a keypad.."