Don’t use one fund to bail out another. Scotland’s Martin Currie (₤5 billion AUM) just got slapped with $14 million in fines from the SEC and FSA for using the assets of one of its U.S. mutual funds to rescue one of its hedge funds from a liquidity crisis in 2009. The former bought bonds from a Chinese company which then used the proceeds to redeem a concentrated and illiquid position in another issue of its bonds held by the latter. The mutual fund lost 50% on the bonds it bought and Martin Currie was charged by the regulators with mishandling the conflict of interest. See http://online.wsj.com/article/BT-CO-20120510-716100.html.