The hedge fund industry receives a tremendous amount of negative coverage in the mainstream media. This is further exacerbated by political candidates, on both sides of the aisle, who have characterized the federal tax paid by hedge fund professionals to be lower than the taxes paid by truck drivers and secretaries. It is often difficult to discern if this narrative is being driven by the media or by the politicians. Either way, it is patently false. Hedge fund professionals are, deserving or not, the most recent poster boys for the one percent.

A Parallel Narrative

In this unwelcome role, hedge funds are prey to heightened scrutiny, not only from the media, but also from the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), regulators and the aforementioned politicians. One might argue that hedge funds have become a target, not unlike other minorities in our country, albeit a less sympathetic one.

The feeling of hopelessness shared by all minorities may account for the lack of spine displayed by so many that find themselves faced with charges brought by one or another government agency. Maybe they are guilty, although many settle these matters without acknowledging guilt.

Also possible, is that in the best fiduciary interests of their clientele they make the choice to go quietly and conserve financial resources.

Then there is Leon Cooperman, founder of Omega Advisors and hedge fund multi-billionaire. Cooperman, you may recall, authored an open letter to President Obama at the height of the Occupy Wall Street movement in 2011, in which he appealed to the President to stop encouraging what he perceived to be class warfare.

Insider Trading

Unsurprisingly, Mr. Cooperman has been indicted for insider trading, the soup de jour of the SEC.

Mr. Cooperman, appearing on Squawk Box, said, “We could have settled this matter with the SEC for an amount that is far less than I donate to charity every year, but I refused to do so because I know that we acted appropriately and lawfully.”

This is not the first time an accused inside trader has protested his innocence. The case of SAC Capital Management comes to mind. Founder Steve Cohen fought the good fight against the SEC and wound up paying out more than $600 million in fines and transitioning his firm to a family office.

Another High-Profile Case

Hedge fund titan, Daniel Och, of Och-Ziff Capital Management, recently settled a Foreign Corrupt Practices Act case for the enormous sum of $413 million, which resolved outstanding civil and criminal charges resulting from a five-year investigation into the firm’s African subsidiary.

Will Cooperman Also Fold?

It is impossible to know, however, in his Squawk Box interview, Cooperman recalled the words of Representative Robert G. Harper of South Carolina who famously said, “Millions for defense but not one penny for tribute.” This sounds very much like a man prepared to stand his ground and fight.

If this brings to mind a certain municipal police department, accused by the DOJ of using traffic laws to target the community’s minorities for the purpose of extracting outrageous fines, and wondering if it is possible that the Department of Justice and the Securities and Exchange Commission have been using similar tactics against hedge funds—that’s understandable.

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