The ‘dark side' of the hedge fund industry is revealed

``Research from Cass Business School, which is part of City University London, reveals a "dark side" whereby those hedge funds that are more closely connected to other hedge funds take more risks and give inferior investor returns... "It is not uncommon for a prime broker to pass information on about whether a certain stock is being shorted by other hedge funds, and to what extent, without naming any particular fund. In addition there is anecdotal evidence that prime brokers perform bridging between their clients; that is they inform some of their hedge fund clients about selective trades made by others knowing that this information could be a source of competitive advantage," Cass said.''