The FCA, the UK’s new consumer protection agency, revealed that someone had been posing as the firm in a bid to market share-dealing services. The real KKR – which was informed about the scam by a “concerned investor” (perhaps looking for a freebie) – confirmed huffily that it didn’t even offer this kind of service.
In First Round’s expert opinion, this raises two key questions.
First and foremost, is KKR really sure it doesn’t offer this? Let’s be honest: it’s been adding new product and service lines at such a rate over the last decade that it’s not hard to imagine there being one that the top brass have just completely forgotten about. Maybe Henry just agreed to it on a whim in the staff canteen one day, and then just forgot to mention it to Compliance?
Maybe even now there’s a man in a grey suit sitting at a desk in a corner of its New York office, muttering about 401ks and bemoaning the fact that his little retail operation doesn’t get enough kudos from all the buyout guys.
On the other hand, if KKR really doesn’t offer this service – if it really does fall into the ever-shrinking category of “financial services stuff KKR doesn’t do” – it does makes First Round wonder just how dim these wannabe fraudsters are. After all, it’s not as if they were short of other, more plausible, options.
Defrauding retail investors is clearly A Very Bad Thing, and KKR is right to be cross about some ne’er-do-wells taking its name in vain. But First Round can’t help feeling that if anyone was actually daft enough to fall for a scam this flimsy, chances are that they’ve got bigger problems.