An Atlanta hedge fund manager admitted he falsified his returns for more than three years, according to a lawsuit filed by three investors.
The accusation has rocked the upper levels of Atlanta society in where hedge fund manager Robert Duncan of Seaside Asset Management moved. According to the lawsuit, at a meeting two weeks ago with two clients who had repeatedly tried to redeem their investments, Duncan told the managers of the Piedmont Family Office Fund and West Mountain Partners that his consistent returns were nothing but “a massive fraud.”
At the March 16 meeting, Duncan told Piedmont’s William Brookshire and West Mountain’s Paul Alar that he had used “substantial funds” for personal use and has been falsifying the fund’s financial statements since 2005 or 2006 to hide the misappropriation, according to the lawsuit.
“As a result of defendant’s fraudulent scheme, plaintiffs have been unable to redeem their interest in Seaside and have had substantial funds converted and misappropriated by defendant,” the complaint alleges.
The amount of the fraud is thought to be in the neighborhood of $4.5 million.
For his part, Duncan isn’t saying much, telling The Wall Street Journal simply that he was working on how to return money to his clients. Seaside is believed to have managed about $20 million.
“I want everyone to have their money back,” he told the Journal.
At the request of the plaintiffs, Duncan’s assets have been frozen. They are seeking compensatory and punitive damages, plus prejudgment interest and attorneys fees.