The SEC has charged a hedge fund investment advisory firm and its two founders with orchestrating a multi-faceted scheme to defraud clients and failing to comply with fiduciary obligations.
The SEC alleges that the founders misappropriated client assets, inflated assets under management, and filed false information with the SEC and that they looted approximately $1.8 million of assets from a hedge fund they manage. The Commission alleges that they issued promissory notes to conceal a substantial portion of their misappropriation, and misrepresented the amount of capital that some of the partners had invested.
