What Hedge Funds Have Been Hiding

With the recent Hedge Fund problems, Harlan Platt, a business school professor at Northeastern University's College of Business Administration and turnaround expert, wonders if the subprime crisis will shine light on assets the hedge funds may have been hiding:
"Another problem that the recent financial crisis has revealed is that when hedge funds own non-listed assets that they get to set the price themselves," Prof. Platt suggests. "This is kind of like letting student write an exam and then grade it themselves with the teacher never seeing their paper. Not surprisingly, every student has earned an A. There is an element of this in the hedge fund market. Funds invested in illiquid assets pray that those assets don't trade in this tumultuous period because then they would need to reveal their portfolio. You have to wonder how badly some of these highly leveraged funds have done."