October 29, 2007
Harrington Reemerges to Speak About Fund Scandal & Source of Her Courage
It's been four years since Noreen Harrington has appeared on the scene, but she recently spoke before an industry group on why she blew the whistle on the market timing and late trading at Canary Capital, setting off the shocking scandal that rocked the fund industry, cost it $5 billion in fines and nearly tarnished its reputation forever.
In hearing her tale, one can only marvel at how incredibly brave she was to take on Edward J. Stern, Canary principal and son of Leonard Stern, one of the most powerful and, worth $3 billion, richest magnates in New York.
Certainly, it hasn't been easy for Harrington since she tipped off former New York Attorney General Eliot Spitzer. Spitzer promised he would take her name to his grave, but when an intrepid reporter told her he would out her, she stepped forward. That day, Spitzer sent a car to meet Harrington in the basement of her building and hired an armed guard to protect her for months.
"It's been brutal," she told "60 Minutes" not long after. "People on the Street have been hurt by this. I fully expect doors to close to me. Whistleblower is such a negative term. If we want to send investors a message that we're looking out for them, then I should still be employable. But people don't want to hire you because instead of applauding your ethics and integrity, they say they can never really trust you."
That certainly was true for Harrington. In the first two years after the scandal, she couldn't find work. In 2005, she started her own hedge fund and now is finally a managing partner with another outfit.
In her recent speech, before the Edmonton CFA Society, Harrington said what finally gave her the courage to turn informant was the realization of how the timing and late trading was jeopardizing millions of people's retirement.
"In this industry," she said, "we deal with huge numbers. A lot of times it's not very human. You forget that it represents the firemen and the teachers, and the money we manage is their life's work."
(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.