D.B. Zwirn & Co.

Because the investigations into the accounting issues delayed D.B. Zwirn & Co.’s ability to complete its regular annual financial statements, it was unable to provide certain needed documents to investors in a timely manner, contributing to the firm’s ultimate decision to wind down the related funds and sell the company’s remaining assets. In negotiations with a variety of potential buyers, CEO Daniel Zwirn resisted selling D.B. Zwirn & Co.’s assets to any firm that intended to charge its investors higher fees. The firm sold its assets to an affiliate of Fortress Investment GroupFortress Investment Group LLC and closed its doors in 2009. The SEC finished its investigation and cleared the firm and CEO Zwirn in 2011, more than four years after the firm had self-reported its accounting irregularities and its corrective action to the government.

Because the investigations into the accounting issues delayed D.B. Zwirn & Co.’s ability to complete its regular annual financial statements, it was unable to provide certain needed documents to investors in a timely manner, contributing to the firm’s ultimate decision to wind down the related funds and sell the company’s remaining assets. In negotiations with a variety of potential buyers, CEO Daniel Zwirn resisted selling D.B. Zwirn & Co.’s assets to any firm that intended to charge its investors higher fees. The firm sold its assets to an affiliate of Fortress Investment GroupFortress Investment Group LLC and closed its doors in 2009. The SEC finished its investigation and cleared the firm and CEO Zwirn in 2011, more than four years after the firm had self-reported its accounting irregularities and its corrective action to the government.

D.B. Zwirn & Co. was established as a spinoff from the investment management company Highbridge Capital ManagementHighbridge Capital Management in 2004, with Daniel Zwirn, who had been head of the Special Opportunities Group at Highbridge since 2001, as managing partner and chief investment officer. With the spinoff, the name of the operation was changed from Highbridge/Zwirn Capital Management to D.B. Zwirn & Co.

Daniel Zwirn, managing partner and chief investment officer of D.B. Zwirn & Co., had worked in investment and investment management roles previously at Highbridge, Davidson Kempner Capital Management, Madison Dearborn Partners, and, immediately before Highbridge, had founded the Special Opportunities Group of MSD Capital, the private investment firm of Michael Dell. Zwirn was educated at Harvard Business SchoolHarvard Business School, where he earned an MBA, at the University of Pennsylvania Wharton School of BusinessUniversity of Pennsylvania Wharton School of Business (BS in economics), and at the University of Pennsylvania Moore School of Electrical EngineeringUniversity of Pennsylvania Moore School of Electrical Engineering (bachelor of applied science in computer science).

The fact that the SEC took more than four years to investigate voluntarily-reported accounting irregularities before clearing the firm and its founder of wrongdoing has become a well-known cautionary tale about the possibility of being too transparent in the investment industry. In 2012, Bloomberg Businessweek called the episode “a hedge fund horror story” not because of any wrongdoing by the firm, but because financially modest infractions by an employee without top management’s knowledge snowballed into a crippling series of investigations and roadblocks that led to the firm’s closing. In 2018, the industry publication HFM ComplianceHFM Compliance published an article on the advantages and disadvantages of self-reporting, “Should hedge funds self-report?” that featured D.B. Zwirn & Co. In November 2021, as a guest on a podcast, Daniel Zwirn said of his decision to report the irregularities he discovered at the firm, “Reputation isn’t under your control. Only character is...I had a whole string of decisions that I needed to make where I had to choose between cataclysmic potential negative consequences and character.” In 2018, Zwirn said of his decision to self-report, “In hindsight, I would do so again as it was the only ethical and correct path to take.”

The fact that the SEC took more than four years to investigate voluntarily-reported accounting irregularities before clearing the firm and its founder of wrongdoing has become a well-known cautionary tale about the possibility of being too transparent in the investment industry. In 2012, Bloomberg Businessweek called the episode “a hedge fund horror story” not because of any wrongdoing by the firm, but because financially modest infractions by an employee without top management’s knowledge snowballed into a crippling series of investigations and roadblocks that led to the firm’s closing. In 2018, the industry publication HFM Compliance published an article on the advantages and disadvantages of self-reporting, “Should hedge funds self-report?” that featured D.B. Zwirn & Co. In November 2021, as a guest on a podcast, Daniel Zwirn said of his decision to report the irregularities he discovered at the firm, “Reputation isn’t under your control. Only character is...I had a whole string of decisions that I needed to make where I had to choose between cataclysmic potential negative consequences and character.” In 2018, Zwirn said of his decision to self-report, “In hindsight, I would do so again as it was the only ethical and correct path to take.take.” In 2015, Daniel Zwirn founded the global special-situations investment firm Arena Investors, LP, where he is CEO and chief investment officer.

In 2015, Daniel Zwirn founded the global special-situations investment firm Arena Investors, LP, where he is CEO and chief investment officer.

The fact that the SEC took more than four years to investigate voluntarily-reported accounting irregularities before clearing the firm and its founder of wrongdoing has become a well-known cautionary tale about the possibility of being too transparent in the investment industry. In 2012, Bloomberg BusinessweekBloomberg Businessweek called the episode “a hedge fund horror story” not because of any wrongdoing by the firm, but because financially modest infractions by an employee without top management’s knowledge snowballed into a crippling series of investigations and roadblocks that led to the firm’s closing. In 2018, the industry publication HFM Compliance published an article on the advantages and disadvantages of self-reporting, “Should hedge funds self-report?” that featured D.B. Zwirn & Co. In November 2021, as a guest on a podcast, Daniel Zwirn said of his decision to report the irregularities he discovered at the firm, “Reputation isn’t under your control. Only character is...I had a whole string of decisions that I needed to make where I had to choose between cataclysmic potential negative consequences and character.” In 2018, Zwirn said of his decision to self-report, “In hindsight, I would do so again as it was the only ethical and correct path to take.” In 2015, Daniel Zwirn founded the global special-situations investment firm Arena Investors, LP, where he is CEO and chief investment officer.

D.B. Zwirn & Co. was established as a spinoff from the investment management company Highbridge Capital Management in 2004, with Daniel ZwirnDaniel Zwirn, who had been head of the Special Opportunities Group at Highbridge since 2001, as managing partner and chief investment officer. With the spinoff, the name of the operation was changed from Highbridge/Zwirn Capital Management to D.B. Zwirn & Co.

Daniel Zwirn, managing partner and chief investment officer of D.B. Zwirn & Co., had worked in investment and investment management roles previously at Highbridge, Davidson Kempner Capital ManagementDavidson Kempner Capital Management, Madison Dearborn PartnersMadison Dearborn Partners, and, immediately before Highbridge, had founded the Special Opportunities Group of MSD CapitalMSD Capital, the private investment firm of Michael Michael Dell.Dell. Zwirn was educated at Harvard Business School, where he earned an MBA, at the University of Pennsylvania Wharton School of Business (BS in economics), and at the University of Pennsylvania Moore School of Electrical Engineering (bachelor of applied science in computer science).

The fact that the SEC took more than four years to investigate voluntarily-reported accounting irregularities before clearing the firm and its founder of wrongdoing has become a well-known cautionary tale about the possibility of being too transparent in the investment industry. In 2012, Bloomberg Businessweek called the episode “a hedge fund horror story” not because of any wrongdoing by the firm, but because financially modest infractions by an employee without top management’s knowledge snowballed into a crippling series of investigations and roadblocks that led to the firm’s closing. In 2018, the industry publication HFM Compliance published an article on the advantages and disadvantages of self-reporting, “Should hedge funds self-report?” that featured D.B. Zwirn & Co. In November 2021, as a guest on a podcast, Daniel Zwirn said of his decision to report the irregularities he discovered at the firm, “Reputation isn’t under your control. Only character is...I had a whole string of decisions that I needed to make where I had to choose between cataclysmic potential negative consequences and character.” In 2018, Zwirn said of his decision to self-report, “In hindsight, I would do so again as it was the only ethical and correct path to take.” In 2015, Daniel Zwirn founded the global special-situations investment firm Arena Investors, LPArena Investors, LP, where he is CEO and chief investment officer.