Finished giving the investing community a crash course in things to not do if you desire to avoid having your name mentioned in the press in conjunction with "massive fraud" that is! For those of you just joining us, please review the notes from yesterday's lesson, which include but are in no way limited to: don't steal $3 million from your former employer, don't allow "tough-looking men" to drop by the office during business hours "all the time," don't throw stacks of $10,000 at a bunch of girls from the office on the way back from a trip to Vegas (or at least don't take pics), and don't tell your partner "I want you to know we are in a Ponzi scheme." Moving on!
Today we look at leaving major funds in your $4 billion private equity firm unaudited. It's just not a good idea. Makes haters say stuff like, "this is a red flag."
Now, in the event that you've already made this mistake, don't panic. Just devise a statement. I'm sure what you want to say, and I don't at all blame you, is basically, "Who the fuck are you to put me on trial? I've never even met you." Rather, though, consider something like this:
A spokesman for PEMGroup said the lack of an auditor at some funds isn't a problem. "Investors can look at any and all records they so choose," said the spokesman, Mike Sitrick. He said one investor, which he didn't name, recently brought in its own auditor to comb through the books of a PEMGroup fund and "came away completely satisfied." He added that investors are aware some funds are unaudited before they put in money and that some funds do provide for external auditors.