DESK 2 — FILE OPEN
FOLDER L-0923CASE #1998-0923SHELF 4 / ROW C
CLOSED
BUREAU OF COMMERCIAL DEATHS
DIVISION OF COLD CASES / FORM 41-D / DEATH OF A GOING CONCERN
CASE NUMBER
CASE #1998-0923
SUBJECT
LONG-TERM CAPITAL MANAGEMENT
DATE OPENED
1994 — Greenwich, Connecticut
DATE CLOSED
September 23, 1998 (recapitalized); dissolved 2000
KNOWN ALIASES
LTCM
INVESTIGATOR
Det. Redact
CAUSE OF DEATH
Subject wagered that historical relationships would hold. Russia defaulted.
PEAK VALUATION
$4,600,000,000 in equity against $125,000,000,000 in positions
ASSETS RECOVERED
$3,625,000,000 rescue by fourteen institutions; wound down 2000
CLASSIFICATION — MARK ONE
FRAUD
NEGLIGENCE
✕HUBRIS
MARKET FORCES
UNKNOWN
EVIDENCE SUMMARY
Two of subject’s principals held the Nobel Memorial Prize in Economic Sciences.
Positions were leveraged at approximately twenty-five to one before losses, and considerably more after.
The Federal Reserve Bank of New York convened a meeting rather than a funeral. The distinction was procedural.
Remainder of statement sealed:
FILED BY Det. Redact · BADGE 0001NO FURTHER ACTION AUTHORIZED
PROPERTY OF THE BUREAUDO NOT REMOVE FROM ROOM 0114
MARGIN NOTE — INVESTIGATING OFFICER
Two laureates. I have stopped being impressed by paper. Ask me about the paper some time.
The model was fine. The world wasn’t.
EVIDENCE TAG
ITEM L-0923
SUBJECT LONG-TERM CAPITAL MANAGEMENT
RECEIVED 1998
CONDITION AS FOUND
SUBJECT LONG-TERM CAPITAL MANAGEMENT
RECEIVED 1998
CONDITION AS FOUND