MANY INVESTORS IN THE FUND WERE NOT AWARE OF THE LEVEL OF LEVERAGE...
5. Many investors in the fund were not aware of the level of leverage being
employed by the fund both implicitly through the use of derivatives and
explicitly through borrowed funds.
Biggles goes on to evaluate the current Code of Ethics employed by Epic. She begins by
reviewing two of the firm’s compliance procedures, shown in Exhibit 2 below:
Exhibit 2
Epic Advisers Code of Ethics
Risk Management Process:
Managers are directly responsible for understanding and managing the risks inherent
in the funds that they run. The company is not deemed to be of a large enough size to
warrant a separate risk management function.
Record Keeping:
Records substantiating investment activity, research, policies and procedures, as well
as records of any violations and actions taken must be kept in electronic form at least
five years, as required by local regulation.